MFS Africa has signed an agreement to acquire Nigeria’s fintech company, Capricorn Digital. The amount was undisclosed, but according to Capricorn Digital Founder and Chief Executive Degbola Abudu, the deal will become the second-highest fintech acquisition in Nigeria so far, behind Stripe’s $200 million Paystack acquisition deal last year.
With a formidable network of 90,000 agents across the country, Capricorn is one of Nigeria’s largest digital solutions and distribution companies. The company operates an ecosystem of digital payment services through its flagship product Baxi, which gives users access to a broad range of products that solve everyday payment needs, including utility bill payments, airtime purchases, data subscriptions, withdrawals and money transfers. Baxi accomplishes these via its four product offerings; BaxiBox/PoS, Baxi Pay, Baxi MPoS, and BaxiRIMS.
MFS Africa’s total cash acquisition of Capricorn—its third in five years, sees the payments giant expand into one of Africa’s largest markets, where its presence to date has been restricted due to the country’s small number of mobile wallets.
Founded in 2009, MFS Africa operates the largest interoperability network in Africa, connecting banks, telcos, and money transfer operators across over 35 countries through a single integration point. Paga, MTN mobile money, Ecobank, and Safaricom make up part of the operators integrated on the hub, with an estimated 320 million mobile money customers interacting across various digital wallets, without transaction fees associated with switching platforms.
The company’s expansion of its mark into Nigeria is a leap forward in actualizing its big vision which is to have a presence in all 54 African countries, serving 500 million people and millions of small businesses, according to Chief Executive DareOkoudjou.
With this acquisition, Capricorn Digital will become a larger company that fuses MFS Africa’s interoperability between money operators, and a super-agent network reaching the mass market. “By teaming up with MFS Africa, and with the strong support of our local commercial banking partners, we can offer more value-added products and services, such as cross-border payments, to support Nigerian SMEs in their growth,” Capricorn Chief Executive Degbola Abudu said.
Capricorn will be called MFS Africa, but the name of its core product, Baxi, will be left unchanged. Following the finalization of the deal, MFS Africa will integrate Baxi into a key node on its digital payment network, allowing customers to make cross-border payments to and from Nigeria. MFS Africa will also expand Baxi’s proposition for offline Small and Medium Enterprises to select markets within its footprint.
Additionally, MFS Africa plans to engage with Nigeria’s Central Bank and other regulators to obtain any other additional licenses required to run its full-service offerings—such as remittance, micro-lending, and insurance, while also looking out for commercial partnerships in the country.
The deal is yet to be finalized, as it remains subject to approval from the Central Bank of Nigeria.