Airtel Africa Secures $100 Million Investment from Mastercard for Mobile Money Business

Just two weeks after TPG’s Rise Fund invested $200 million in Airtel Mobile Commerce BV (AMC BV) – the mobile money division of Airtel Africa – a further investment has been announced.

Airtel Africa will receive an additional $100 million from global payments technology company, Mastercard, for its mobile money operations. This brings the total valuation of AMC BV to $2.65 billion.

Details of the Investment and AMC BV’s Operations

AMC BV is a leading financial services provider in Africa, offering a wide range of services to its users. These include mobile wallets, international money transfer capabilities, access to loans, and virtual credit cards.

The partnership between Airtel Africa and Mastercard isn’t new. A previous agreement in 2019 granted Airtel Africa’s 100 million subscribers across 14 countries access to Mastercard’s extensive global network. This earlier collaboration did not involve a financial exchange.

Expanding the Partnership

Today’s announcement signifies an expansion of the existing commercial agreements. A new framework has been established to deepen collaboration in areas such as card issuance, payment gateways, payment processing, merchant acceptance, and remittance solutions.

Ownership Structure and Investment Timeline

The $2.65 billion valuation of AMC BV, calculated on a cash and debt-free basis, remains consistent. Upon completion of both deals, TPG’s Rise Fund will hold a 7.55% stake, while Mastercard will own 3.775%.

Mastercard’s investment will be deployed in two phases: an initial $75 million within the next four months, followed by a further $50 million at a second closing.

Strategic Goals for Airtel Africa

Airtel Africa intends to leverage these investments to monetize its mobile money business and potentially pursue a public listing within the next four years. Selling minority stakes is a key component of this strategy.

Asset Monetization and Debt Reduction

Alongside securing investments, Airtel Africa is actively selling off assets. Recently, the company sold 1,424 telecommunications towers in Madagascar and Malawi to Helios Towers for $119 million.

Furthermore, an agreement has been reached with Helios Towers to exchange tower assets in Chad and Gabon, with specific details yet to be disclosed.

These actions are all part of a broader strategy focused on strategic asset monetization, identifying new investment opportunities, and reducing the company’s debt.

Executive Commentary

Raghunath Mandava, CEO of Airtel Africa, expressed his satisfaction with the investment, stating: “With today’s announcement, we are pleased to welcome Mastercard as an investor in our mobile money business, joining The Rise Fund, which we announced two weeks ago.”

He further elaborated: “This is a continuation of our strategy to increase the minority shareholding in our mobile money business with the further intention to list this business within four years. We are significantly strengthening our existing strategic relationship with Mastercard to help us realise the full potential from the substantial opportunity to improve financial inclusion across our countries of operation.”