QIA Infuses US$200 Million Into Airtel Africa’s Mobile Money Businessby Sharon Lewis 5 August 2021
Airtel Africa’s mobile money business has amassed US$200 million for its Airtel Mobile Commerce BV (AMC BV) from Qatar Holding, Airtel Africa announced.
Qatar Holding is an affiliate business of Qatar Investment Authority (QIA).
Of the total investment amount, US$150 million will be invested at first close in August this year. QIA will also be appointing one director to AMC BV’s board upon first close.
The remaining US$50 will be invested at second close, after some of Airtel Africa’s mobile money operations and contracts have been transferred to AMC BV.
The deal valued Airtel Africa’s mobile money business at US$2.65 billion, with QQIA receiving a minority stake in AMC BV. Airtel Africa will continue to be the majority stakeholder, and is looking to take AMC BV public in the next four year.
The news comes five months after AMC BV raised US$200 million from TPG’s The Rise Fund in March this year. Around the same time, the company also sold its telecommunication towers businesses in Madagascar and Malawi. The next month, it also received UUS$100 million from MasterCard.
The investment is aimed at asset monetisation and investment
The deal is aimed at “strategic asset monetisation and investment opportunities,” a statement from the company said. Funds will be used to reduce the company’s debt, and invest in network and sales infrastructure in Airtel Africa’s operating countries.
AMC BV is a holding company for large segments of Airtel Africa’s mobile money operations. AMC BV’s offerings include mobile wallet deposit and withdrawals, payments, benefits transfers, loans and savings, virtual cards, and international money transfers.
The company will eventually own and operate all of Airtel Africa’s mobile money businesses across fourteen countries.
Airtel Africa had announced in February this year that it would be looking to sell a minority stake in its mobile money business to raise cash. It would also be looking to sell the remaining tower sites owned by the company, it said.
In 2020, Airtel Africa’s mobile money business pitched in 10% of the US$2.87 billion it generated in revenues. Total revenues represented a growth of 13.8% year on year, with Nigeria coming through at the top of the leaderboard.
Its mobile money business was also bolstered by partnerships with Mastercard, Samsung, Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit last year.
For Q1 2021, Airtel Africa’s mobile money businesses (including those not yet under AMC BV’s control) generated US$124 million in revenues, with EBITDA standing at US$60 million. This represents a revenue margin of 48.8%, and a year on year growth of 53.7%, the company said.
Revenues were largely driven by an increase in customer base as well as average revenue per user. Untaxed profits by Airtel Africa’s mobile money businesses for the year ended March 2021 stood at US$185 million.
“With today’s announcement we are pleased to welcome QIA as a prospective investor in our mobile money business, joining both Mastercard and TPG’s The Rise Fund as a further partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa,”
Raghunath Mandava, CEO of Airtel Africa, said about the investment.
Featured image credit: Edited from Unsplash