Africa’s veteran FinTech firm Interswitch became the sector’s first unicorn following a $200 million investment by Visa that gave it a 20 percent equity stake in the firm, SkyNews reported on Sunday (Nov. 10), citing a source.
Interswitch has long been expected to launch an initial public offering (IPO) after the company’s previous plans for a 2016 IPO were scrapped amid a recession in Nigeria.
The Visa funding makes Interswitch one of the most valuable African FinTech businesses, with a valuation of $1 billion. Other investor stakeholders include Helios Investment Partners, TA Associates and IFC, Interswitch said in a press release on Tuesday (Nov. 12).
Founded in 2002, Interswitch disrupted the payments space in Nigeria by introducing electronic payments in a largely cash-based society. Interswitch is now among the leaders in Nigeria’s developing financial ecosystem.
“Sub-Saharan Africa is the fastest-growing payments market in the world, with growth driven by a young and dynamic population, rapidly evolving consumer behavior and an increasing desire for payment solutions that can be accepted across the continent and abroad,” said Interswitch Founder and CEO Mitchell Elegbe.
The electronic payments market in Sub-Saharan Africa is anticipated to grow by about 35 percent from 2018 to 2023. Last year, electronic payments in Africa accounted for only 12 percent of transactions.
“Africa is a priority region for us, and we continually seek strategic partnerships with local players to further strengthen our leadership position and enhance the payments ecosystem across the continent,” said Andrew Torre, regional president CEMEA, Visa.
Interswitch also owns the domestic debit card Verve and operates the consumer payments platform Quickteller.
Visa first partnered with Interswitch in 2017 to accelerate mobile payments adoption across the region. The two companies upgraded the digital banking applications of leading banks to include mVisa, a mobile payments solution that allows consumers to pay for goods from any type of phone by either scanning a QR code or entering a merchant number.