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The Rise Fund to invest $200m in Airtel Mobile Commerce

Anna Lyudvig
March 18, 2021, 1:48 p.m.
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The Rise Fund, the global impact investing platform of alternative investment firm TPG, has agreed to invest $200m in Airtel Mobile Commerce (AMC), a wholly owned subsidiary of Airtel Africa, at $2.65bn valuation.

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The Rise Fund, the global impact investing platform of alternative investment firm TPG, has agreed to invest $200m in Airtel Mobile Commerce (AMC), a wholly owned subsidiary of Airtel Africa, at $2.65bn valuation.

The Rise Fund will hold a minority stake in AMC upon completion of the transaction, with Airtel Africa continuing to hold the remaining majority stake.

A newly incorporated investment vehicle of The Rise Fund will invest $200m through a secondary purchase of shares in AMC from Airtel Africa.

The transaction will close in two stages: $150m will be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC has been completed, with $50m to be invested at second close upon further transfers.

The transaction is expected to reach first close over the next three to four months.

The transaction is subject to customary closing conditions including necessary regulatory filings and approvals, as necessary, and the inclusion of specified mobile money business assets and contracts into AMC.

Airtel Africa is a provider of telecommunications and mobile money services with presence in 14 countries across Africa.

AMC is currently the holding company for several of Airtel Africa’s mobile money operations; and is now intended to own and operate the mobile money businesses across all of Airtel Africa’s operating countries.

The transaction is the latest step in the Group’s pursuit of strategic asset monetization and investment opportunities, and it is the aim of Airtel Africa to explore the potential listing of the mobile money business within four years.

The Group is in discussions with other potential investors in relation to possible further minority investments into Airtel Money, up to a total of 25% of the issued share capital of AMC.

There can be no certainty that a transaction will be concluded or as to the final terms of any transactions.

The proceeds from the transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.

Yemi Lalude, Partner at TPG who leads Africa investing for The Rise Fund, said: “Financial inclusion is a global issue that is most acute in Africa. Through Airtel Money, Airtel Africa has built a unique platform that is closing the gap between traditional financial institutions and the millions of unbanked Africans across the 14 countries where Airtel Africa operates.”

“We look forward to working with Airtel Africa to enhance their mobile money services, broaden its use cases, and grow into new markets. With this investment in Airtel Africa’s mobile money operations, we are excited to expand The Rise Fund’s global fintech portfolio and continue to deepen our focus on improving financial inclusion in Africa and around the world.”

Raghunath Mandava, CEO of Airtel Africa, added: “In line with our vision of enhancing financial inclusion, Airtel Africa offers a unique digital mobile financial services platform under the Airtel Money brand. In most of our markets there is limited access to traditional financial institutions, and little banking infrastructure, with less than half of the population having a bank account across sub-Saharan Africa. Our markets therefore afford substantial market potential for mobile money services to meet the needs of the tens of millions of customers in Africa who have little or no access to banking and financial services, and this demand is driving growth.

With today’s announcement we are pleased to welcome The Rise Fund as an investor in our mobile money business and as a partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa.”

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