Investors update: Kenya’s Cellulant anticipates $30bn in payments processed this year

Kenya’s Cellulant anticipates $30bn in payments processed this year

Highlights

• In 2021, Cellulant, a pan-African payments company, processed approximately 214 million transactions totaling $12.3 billion across 35 African markets and for over 200 million Africans.
• The Kenya-born company anticipates that figure to hit $30 billion, making it one of the continent’s foremost payment companies alongside Nigerian giants Flutterwave and Interswitch.
• Cellulant offers a unique set of capabilities to serve as the one-stop payment platform for companies. Its flagship Tingg platform helps businesses address the problems associated with collections and payouts.

Source: Prox Weekly

Our Takeaway

In Africa, digital payments continue to take root, but the uptick differs depending on the country. Up to 70% of the global total value of mobile money transactions is conducted in Africa, according to GSMA.  Digital payments in Africa is already a +$400 billion industry, with more opportunities for future growth, however. Africa has more than 500 million underbanked or unbanked, less than 50% of the continent’s adult population have made or received digital payments and more than 40 million merchants do not accept digital payments

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Fintech Galaxy acquires Egypt’s open banking platform Underlie

Highlights

• UAE-based Fintech Galaxy, which provides access to customer data from partner banks while allowing developers to build new apps and services, has acquired Underlie, an Egyptian counterpart, for an undisclosed sum. 
• Underlie was founded in 2021 by Akram Abdouby and offers API-based solutions to improve the integration of online apps from banks and fintech companies.
• Egypt is Fintech Galaxy’s sixth market after the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, and Moldova.

Source: Wamda

Our Takeaway

Across Africa, open banking has seen considerable traction in recent years with several startups enabling developers to build for the continent with ease and quickly. Commercial banks and other financial institutions also partner up with API startups to provide digital financial services. The future of financial services in the region rests on interoperability across several players and services. As the fintech startup ecosystem matures, we expect to see infrastructure-focused startups seek growth opportunities in new markets, supported by increased venture capital backing and consolidation.

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Norsad and TLG launch $400m African credit platform for SMEs

Highlights

• Impact investor Norsad Capital and TLG Capital have partnered to build a $400 million private credit platform for medium-sized companies across sub-Saharan Africa. 
• Their partnership will involve sharing, presenting, and co-investing in well-structured credit investment opportunities with strong layers of downside protection and equity upsides embedded.
• Both companies plan to further promote syndication opportunities and platforms, risk participation structures, jointly offer larger ticket sizes, and provide a balanced capital offering with a mix of senior and subordinated debt.

Source: Ventureburn

Our Takeaway

Along with other kinds of investments such as FDI, FPI, and venture capital, impact investing—financing for companies with the intention to generate social and environmental impact alongside a financial return—is a growing phenomenon in Africa, complementing domestic resources to plug Africa’s huge investment needs. Norsad has invested over $500 million into over 160 companies over its 32-year history while TLG has completed over 30 investments to date, exiting more than 20 (notably, all with positive IRRs ranging from 6% to 35%).