Mastercard to invest $100 million in Airtel Africa's Mobile Money

Alan Joseph Alan Joseph
Apr 3, 2021 5 min read
Mastercard to invest $100 million in Airtel Africa's Mobile Money

The global payments giant Mastercard has announced that it will invest $100 million in Airtel Africa’s mobile money business which runs under Airtel Mobile Commerce BV (AMC BV). Let’s look at the information regarding the deal and the future plans of the company.

What is Airtel Mobile Commerce BV
Recent Investments to Airtel Africa’s mobile money
Future Plans of Mastercard in Africa
FAQ

What is Airtel Mobile Commerce BV

Airtel Mobile Commerce BV is currently the company that undertakes and controls the major mobile money operations of Airtel Africa. The company also intends to operate and own all the mobile money business in 14 other countries of Africa which are operating under Airtel Africa.

Airtel Mobile Commerce BV’s services are mainly focused on the unbanked market of the 14 countries of Airtel Africa. Their services include mobile wallet deposits, mobile wallet withdrawals, commercial payments, merchant payments, provision of loans, the opportunity for savings, benefit transfers, virtual credit cards, and international money transfers.

Currently, the company has around 21 million users for its set of mobile payment services. The company had generated a revenue of $110 million in the recent quarter. They have an underlying EBITDA (Earnings before income, tax, depreciation, and amortization) of $54 million.

Airtel Mobile Commerce BV operates one of the largest financial services in the continent. It has a valuation of around $2.65 billion.

Number of customers of Bharti Airtel Limited
Number of customers of Bharti Airtel Limited

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Recent Investments to Airtel Africa’s mobile money

Airtel Mobile Commerce BV received a recent investment of $200 million from TPG’s Rise Fund. The company will own a 7.55% stake in the Airtel Africa’s mobile money service company AMC BV.

After closing the deal with TPG’s Rise Fund the company had plans to have a discussion on selling additional minority stakes of the company which will be around 25% of the issued share capital. They had plans to sell it to potential investors.

Airtel Mobile Commerce BV had announced its most recent investor which is the global payments giant Mastercard. Mastercard has announced that it would invest an amount of $100 million in the company. The company will own a 3.775% stake in Airtel Africa’s mobile money business after the completion of the deal.

The transaction of Mastercard is expected to close in two different portions. The first portion is expected to be closed at $75 million which will be finalized by the next 4 months and an amount of $50 million to be invested in the second phase.

In addition to the investments, they received from TPG’s Rise Fund and the global payments giant Mastercard, Airtel’s Africa is raising funds by selling off some assets. It is reported that recently the company has sold around 1,400 telecommunication towers to Helios in Madagascar and Malawi. The transaction is expected to be $119 million.

Both the companies Airtel Africa and Helios to trade tower assets in Chad and Gabon. The details regarding this transaction are not yet disclosed.


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Future Plans of Mastercard in Africa

Airtel Africa and Mastercard are two individual firms that are stronger to one another. Both the companies had already got into a deal in 2019. The deal provided an opportunity for Airtel Africa’s 100 million subscribers to receive access to the global network of Mastercard.

There 2019 partnership did not have any money exchange. In the most recent deal of Airtel Africa and Mastercard has extended their commercial agreements and have signed a new commercial structure that is focused on improving their partnership in different countries around the globe.

They are planning to concentrate on areas such as issuing of cards, payment processing, payment gateway, merchant acceptance, remittance solutions, etc. amongst the other services provided by the companies.

The CEO of Airtel Africa Raghunath Mandava said, that they were pleased to welcome Mastercard as an investor in their mobile money business. He also added that, this partnership is a continuation of their strategy to increase the minority shareholding of the company’s mobile money business. He said that they have a further intention of listing the business in the next four years.

The CEO also added that they are working towards strengthening their existing relationship with Mastercard which will help them realize the full potential of their considerable opportunity. This is to improve their financial inclusion in all the countries they are currently operating.

Airtel Mobile Commerce BV’s plan of selling the minority stake of the company to Ride Fund, Mastercard, and other potential investors is based on the telecom operator Airtel Africa’s belief to raise enough funds to monetize its mobile money business.

FAQ

What is Airtel Mastercard?

The Mastercard virtual card allows Airtel Money customers, to make payments to local and global online merchants that accept Mastercard cards.

Is Airtel Money wallet safe?

Airtel Money Wallet is an RBI approved payments wallet.

Where is the headquarters of Airtel?

The headquarters of Airtel is located in New Delhi, India.

Conclusion

The company’s efforts are to work towards the pursuit of investment opportunities, asset monetization, and ultimately reduction of debt in the company.

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