Airtel Africa receives $200 million for its mobile money operations from QIA at a $2.65 billion valuation

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Airtel Africa receives $200 million

Airtel Africa, a leading provider of telecommunications and mobile money services has today announced the signing of an agreement under which Qatar Holding LLC, an affiliate of the Qatar Investment Authority (“QIA”), will invest $200 million in Airtel Mobile Commerce BV (“AMC BV”), a subsidiary of Airtel Africa Plc.

AMC BV is the holding company for several of Airtel Africa’s mobile money operations and ultimately is intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.

Airtel Africa’s mobile money services is a leading digital mobile financial services platform catering to a large addressable market in Africa. It provides users access to mobile wallets, support for international money transfers, loans, and virtual credit cards.

This transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt-free basis.

What you should know
In April, global payments provider Mastercard invested $100 million in Airtel Mobile Commerce BV (AMC BV).

The Rise Fund, the global impact investing platform of investment firm TPG, also invested $200 million in Airtel mobile money arm.

According to a statement released by the telecom’s operator, QIA will hold a minority stake in AMC BV with Airtel Africa continuing to hold the majority stake. The deal will close in two tranches — $150 million invested at the first close. The remaining $50 million will be invested at the second close. QIA will be entitled to appoint a director to the board of AMC BV and to certain customary information and minority protection rights.

The proceeds from the Transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.

Airtel Africa’s most recent report for Q1 2021 shows a strong operational performance. The telecoms operator saw a year-on-year revenue growth of 53.7%, largely driven by a 24.6% growth in customer base to 23.1 million. Transaction value went up 64.4% to $14.7 billion ($59 billion annualized); and EBITDA stood at $60 million ($240 million annualized) at a margin of 48.8%. The company also generated $124 million in revenue ($496 million annualized), while its profits before tax year-on-year for Q1 2021 stood at $185 million.

What they are saying
Raghunath Mandava, CEO of Airtel Africa, commented: “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 realize the full potential from the substantial opportunity to bank the unbanked across Africa.”

Mansoor bin Ebrahim Al-Mahmoud, CEO of QIA, commented: “We are delighted to build on our support of Airtel Africa in promoting financial inclusion to the large and growing population of Sub-Saharan Africa. Airtel Money plays a critical role in facilitating economic activity, including for customers without access to traditional financial services. We firmly believe in its mission to expand these efforts over the coming years.”

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