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News > Private Equity > Deals

Ethos achieves first investment and first close for new large buyout Fund

Staff writer
Nov. 6, 2018, 9:03 p.m.
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Word count: 473

Ethos Fund VII, a new large-buyout fund, has invested R700m in Channel VAS, a global provider of mobile financial services, Big Data analytics and airtime credit service.  

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Ethos Fund VII, a new large-buyout fund, has invested R700m in Channel VAS, a global provider of mobile financial services, Big Data analytics and airtime credit service.  

This is the first investment from the fund, which is targeting R8bn in capital commitments from local and international institutional investors. 

The first close of R2bn was achieved from South African-based investors with a view to having a second close of approximately R4bn from additional local investors by Q1 2019.

Channel VAS has mobile subscribers in over 30 countries across Africa, the Middle East, Asia, Latin America and Europe.  

Working together with over 27 MNOs, the company currently serves over 650 million people globally, providing financial inclusion to more unbanked people every day.

Stuart MacKenzie, Ethos CEO, said: “We are delighted to announce Fund VII’s first investment. The Fund successfully held its first close in October to accommodate this transaction and another that is expected to close in the next few months.” 

“We are equally excited to confirm that our new AI Fund is investing alongside Fund VII in Channel VAS. Channel VAS was a complex investment to process due to the business’ geographic footprint and technology model.  It was the exceptional collaboration and collective insights between our deal, AI and value-add professionals that unlocked this uniquely attractive opportunity.”

Michael Jensen, Ethos partner and deal lead, added: “Channel VAS is a sophisticated business with a deep, results-driven understanding of the mobile financial environment and an industry leading capability of increasing the penetration of airtime distribution while minimising default rates.”

This is achieved through sophisticated proprietary big data analytics tools and credit-scoring algorithms. The business model is highly scalable and presents a significant opportunity to expand  their product offering into cutting-edge mobile financial services.”

Channel VAS founder & CEO Bassim Haidar, said: “We are excited to welcome Ethos on board as we continue our journey forward in this fast-moving fintech world.” 

“As Channel VAS has been at the forefront of the Fintech revolution through mobile finance from its very beginning, working together with visionary investors such as Ethos will help us continue to expand our already massive geographical footprint at an even faster pace, bringing financial inclusion to more unbanked and underserved people globally through our innovative services.”

Ethos Fund VII is the successor to large-buyout fund Ethos Fund VI which has R8.6bn of commitments.  

Ethos Fund VII is targeting a similar amount in capital commitments and is expected to hold a final close in mid- to late-2019.
 
Over the past 24 months, Ethos has raised approximately R6.5bn from institutional and development investors: R2.5bn for Ethos Mid Market Fund I; over $100m in the first close of Ethos Mezzanine Partners 3, which is targeting $150m by mid-2019; and R600m in first close commitments to Ethos AI Fund I.  
 

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