Africa’s largest digital payments network, MFS Africa, has raised $100 million in a new Series C funding round—split between $70 million equity and $30 million debt. The round was co-led by Private equity fund AfricInvest FIVE, Goodwell Investments and LUN Partners Group. The round also saw participation from new investors CommerzVentures, Allan Gray Ventures, Endeavor Catalyst, and Endeavor Harvest.
Founded in 2009, MFS Africa seamlessly links mobile money users and service providers, providing access to simple, secure, affordable and compliant mobile financial solutions for all. The company currently connects more than 320 million mobile money wallets across more than 35 African countries. It also covers a broad range of financial services around bank accounts, prepaid cards and virtual debit cards.
The latest fundraise is applaudable, but little when compared with MFS Africa’s previous endeavours. This past year, the London-based startup has made a series of impressive acquisitions and investments. Notable among these is its acquisition of Nigeria’s Baxi, an agent banking platform developed by Capricorn Digital. This acquisition gives MFS Africa access into Africa’s largest market—a market which the company had been eyeing for quite some time. Additionally, it opens the company to a sophisticated agent network unseen in other African markets, according to MFS Africa’s Chief Executive Officer, Dare Okoudjou.
In June last year, the company also fully acquired Beyonic, an Uganda-based digital payments company for small and medium-sized businesses. Coupled with its acquisition of Baxi, and minority stakes in smaller fintechs such as Julaya, Maviance, Numida, and Akorion, MFS Africa has strategically used its investment and acquisitions to exert its influence across the continent—methods Dare Okoudjou describes as “inorganic growth”.
Julius Tichelaar, a partner at AfricInvest FIVE, said in a statement that his firm led the round because MFS Africa’s broad range of financial and payments services resonates with AfricInvest FIVE’s financial inclusion strategy. “Cross border payments remain an important challenge in many African markets today and MFS Africa is uniquely positioned to confront this. We are excited to join MFS Africa’s world-class management team on its mission and to support its growth journey,” he said.
MFS Africa intends to use the fresh capital to intensify its expansion efforts and establish more regional offices across Africa, the United States, and China. The company said that it is currently working on setting interoperability between payment networks in China and Africa, starting from Nigeria before spreading to other markets. According to sources, the timeline for rollout might be next year.
While facilitating payments from Africa to China might be outside the purview of MFS Africa’s holistic pan-African payments approach, the opportunity is one that is good to ignore, as China-Africa bilateral trade is one of the fastest-growing corridors globally, with a value topping $192 billion in 2019.
MFS Africa will also use part of the funding to bolster its Governance, Risks and Compliance (GRC) functions and treasury and liquidity pool. It also plans to hire more talent within and outside the continent and continue investing in other African tech startups.