Interswitch Nears Unicorn Status As Visa Eyes 20% Stake For USD 200 Mn Ahead Of IPO

Interswitch Group, the African fintech unicorn headquartered in Lagos, Nigeria, is going to get USD 200 Mn from payments group, Visa, for a 20 percent stake in its business.

This information was uncovered by Sky News and Visa is looking to purchase a stake in the Nigerian company ahead of a planned IPO on the London Stock Exchange slated for early 2020.

It is understood that Visa is ready to splash the cash on the Nigerian fintech company, doling out hundreds of millions of dollars to acquire a stake in the African payments group.

It’s a deal that will see Interswitch become the latest tech unicorn on the continent.

Sky News gathered that Visa and Interswitch are in advanced talks about a deal worth USD 200 Mn for a 20 percent stake and the transaction could be announced as soon as this week.

If all goes according to plan and Visa does fork out that sum for a stake in the Nigerian fintech, the global payments group will become one of the lead investors in Interdwitch; a strategic move that will put Visa in a good position ahead of Interswitch’s planned IPO in London during the first half of next year.

Interswitch is one of the largest Africa-focused electronic payments and infrastructure companies, with point-of-sale terminals, online consumer payment platforms and its own card, Verve.

Barely a week ago, the company announced the acquisition of Nigerian healthcare company, eClat Healthcare Limited.

Verve is the biggest domestic debit card scheme in Africa, with more than 19 million cards active on its network.

A deal between Visa and Interswitch will facilitate the formation of a strategic partnership that could go on to launch a major onslaught on the fast-growing African digital payment market.

Last month, Visa’s rival. Mastercard, forked out USD 300 Mn for a stake in Network International. a Dubai-based company — actually, the largest payment processor in Africa and the Middle East — that has since entered the stock market in London and held its own quite well too.

The desire to take advantage of established platforms in markets that are both fast-growing and under-penetrated is a good explanation as to why powerhouses like Visa and Mastercard are trying to get some piece of the action in the developing parts of the world.

Interswitch was founded by entrepreneur, Mitchell Elegbe, in 2002. In 2017, the company appointed Sir Kenneth Olisa, a prominent corporate governance stalwart, as its chairman.

Bucking the trend in the fintech space in Africa, Interswitch is both profitable and generating significant levels of cash. The company currently serves up to 24 countries.

The majority shareholder is Helios Investment Partners and an eventual IPO for Interswitch would allow Helios to begin selling down its stake if it so desires.

JP Morgan is leading the syndicate of investment bankers hired to work on Interswitch’s eventual flotation.

Interswitch had earlier plotted an IPO in 2016 but that plan came to nothing after a Nigeria was hit by a severe economic recession.

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