Airtel Africa is planning to sell a minority stake of its mobile money business to private equity firm, TPG for $200 million (Ksh. 21.9 billion), showing the huge value of mobile financial service platforms.
In fact, this transaction indicates financial platforms such as M-Pesa available in Kenya and five other African countries have massive net-worth.
The multinational company has struggled especially in Kenya where they have been recently put under a watchlist by the CA. Airtel has less than 400,000 active customers against M-Pesa’s 27 million users. It is, however, more successful in other countries.
Airtel says the funds raised from the deal will be used to reduce debt and improve network and sales infrastructure in countries that use the mobile financial platform.
This investment could massively increase their market base in the East African community. TPG, is using the Arise Fund to complete the deal and is investing in two phases that will see it pay an initial $150 million and later $50 million.
Airtel, Safaricom, and South Africa’s Vodacom know mobile money is the ‘future of banking’ and have all invested billions to develop innovations that keep them ahead in mobile cash payments and transfers.
Airtel added that the low demand for traditional banking services has been the main demand driver for mobile money services. This deal is bound to be beneficial for Airtel and will send a ripple effect to the whole African mobile money industry.
Next; iPhone users are extremely loyal to the Apple brand; Samsung users, not so much
Alfred Gitonga is a passionate tech news writer with a deep interest in smartphones and related technologies. He is a staff writer at Mobitrends.co.ke.
