3 Fintech Deals & Multiple Markets Signal MFS Africa’s “Hub” Ambitions

At the beginning of April, a certain pan-African fintech venture announced that its payments solutions have reached over 320 million mobile money wallets in the continent.

The company—which specializes in areas like agency banking and bulk bill payments—enables a range of banks, telcos, money transfer operators, and other financial outfits to access large-scale interoperability.

The fintech has significant footprints in Cameroon, Ghana, Rwanda, Uganda, Zambia, and Zimbabwe—with plans to expand to the rest of Africa in future.

To fuel that expansion, MFS Africa has been betting on seemingly scalable, early-stage fintechs, especially in its home markets.

Cameroon’s Maviance after Uganda’s Numidia

MFS Africa’s latest fintech investment is in a Cameroonian startup that enables micro, small and medium-sized enterprises (MSMEs)—as well as their customers—go cashless. As the sole investor in Maviance’s USD 3 Mn funding round, MFS Africa now has its financial fingers in the pie of three local fintech startups.

Before Maviance, the cross-border fintech led the USD 2.3 Mn seed round of Uganda’s Numida Technologies, a startup building one of East Africa’s first digital platforms targeting semi-formal micro and small businesses.

This Ugandan acquisition, in turn, succeeded MFS Africa’s complete takeover of Beyonic, an enterprise-focused digital payments services provider operating in Ghana, Uganda, Tanzania, Kenya and Rwanda. Beyonic, however, is headquartered—or incorporated abroad—in semblance to MFS Africa.

In April, Patrick Gutmann, Managing Director of Banking, Institutions and Government at MFS Africa told WeeTracker that the company is looking to make more minority investments, provide strategic insight and create value to others in the payment space.

The strategy? Investing in African fintech solutions that can be plugged onto the MFS Africa “hub” via commercial collaborations.

MFS Africa began these fintech pick-ups in June 2020 with Beyonic’s buy out. That means the payments provider has invested in three local fintech startups in less than one year, a rather strange string of events given the scarcity of such deals in the African fintech ecosystem.

As it seems, MFS Africa’s ambitions is becoming a payment behemoth in the continent.

What’re we looking at?

As far as Africa-focused venture capital investments are concerned, fintech is the rainmaker. Not only is the sector the most funded in the ecosystem, but also the industry producing two out of the only three fintech startups homegrown to unicorn status.

While MFS’ fintech-only investments consolidate the fintech potential in the region, it also provides a sneak peak into the company’s future intentions.

MFS Africa is pretty much the fintech that makes it possible for a mobile money service like MTN to connect to banks like Ecobank across 34 African countries.

Per the GSM Arena’s 2021 State Of The Industry Report, MFS Africa sits on 60 percent of the total mobile money wallets in Sub-Saharan Africa.

Beyond African fintech startups, MFS Africa also has partnerships with Xoom—a PayPal service designed to enable the diaspora in the United States, the United Kingdom, Canada, and Europe connect to mobile wallets in African nations like Zimbabwe, Cameroon, Rwanda, Uganda, and Zambia. Xoom, which was launched in December 2020, has now extended its prints to Madagascar, Ivory Coast, Mozambique, and Malawi.

Meanwhile, Maviance—the Cameroonian fintech which just received funding from MFS Africa—claims to serve more than 500,000 unique customers a month.

The platform is also connected to key services provider, payment providers, mobile money operators, and financial institutions operating in Cameroon. What’s more? The USD 3 Mn will enable Maviance scale Smobilpay—its flagship digital financial service platform—to other central African economies.

MFS Africa isn’t only acquiring a taste for local fintech ventures, but also cultivating the habit of betting on innovation-driven financial services operational or with the potential to operate in multiple African markets.

Since the fintechs sought after are typically integrated on the “payments hub” that is MFS, it wouldn’t be farfetched to assume the firm is looking to become truly pan-African by such investments. Undeniably, this is one of the easiest ways to build the ideal continental fintech empire.

And henceforth?

Cameroon’s Maviance may not be the first or last local fintech startup MFS invests in or acquires, but it’s consideration from MFS Africa signals that fintech is promising in Africa, regardless of the country.

By receiving such a ticket, Mavince joins a small group of African nations whose early-stage ventures are starting to build investor attraction. It follows similar break-out rounds from ventures in nations like Mali and Botswana.

Generally, Sub-Saharan Africa is the most developed market for mobile money, globally. The region accounts for roughly two-thirds of the world entire mobile money transactions. The implication? There’s a huge opportunity to be leveraged, and MFS is one of the existing companies trying to milk for the not-so-distant future.

A fintech serving businesses acquiring other smaller fintechs that also serves businesses in their respective markets is a way to make interoperability realer in African fintech, and have a more connected financial ecosystem.

The potential is also why Network International completely bought Nairobi-based DPO Group—a payment services provider with operations across Africa.

With Nigeria and Egypt more or less tested as viable fintech markets by mean of their birthed billion-dollar ventures, the smaller markets and the smaller financial operators are starting to get in scope.

And, according to Jerry Cheambe, the founder of Maviance, “The opportunities within central Africa are huge, and the demand has been massively accelerated in the last 12 months with the advent of Covid-19 as businesses of all sizes adopt digital financial services”.

All these intersections signal the awakening of the relatively sleeping giant that is African fintech.

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