Global payments company Mastercard is set to invest $100 million (around Rs 733 crore) in the mobile money business of telecom firm Airtel Africa, joining the impact investment arm of private equity firm TPG as an investor.
Mastercard will hold a minority stake in Airtel Mobile Commerce BV. Airtel Africa will retain a majority stake in the unit.
The agreement values Airtel Africa's mobile money business at $2.65 billion (Rs 19,430 crore) on a cash and debt-free basis.
A few weeks ago, TPG’s The Rise Fund announced an investment of $200 million (about Rs 1,460 crore) in Airtel Mobile Commerce BV at a similar valuation. Airtel also announced the sale of telecom tower companies in Madagascar and Malawi last week.
Alongside the investment, the African telco arm and Mastercard have extended commercial agreements and signed a new commercial framework which will deepen their partnerships across numerous geographies and areas including card issuance and payment gateway.
“As previously announced, Airtel Africa aims to continue to monetise its mobile money business with minority investments up to a total of 25% of the issued share capital of Airtel Mobile Commerce BV, and to explore the potential listing of the mobile money business within four years,” Airtel Africa said.
A telecom operator, Airtel Africa also offers mobile money services under the Airtel Money brand. It offers mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual credit card and international money transfers with a presence in 14 countries across Africa.
In Nigeria, the group offers Airtel Money services through a partnership with a local bank and has applied for its own mobile banking licence.
For the year ended March 2020, the profits before tax and value of gross assets as of that date, attributable to the mobile money businesses, were $143.4 million and $463.2 million, respectively.