Helios strikes another part-exit from Interswitch as LeapFrog, Tana join cap table

 Helios strikes another part-exit from Interswitch as LeapFrog, Tana join cap table

Marquee African private equity firm Helios Investment Partners, which is on the road to raise the largest sector-agnostic fund for the continent, has made another partial exit from its 12-year-old investment in Nigeria-based payments firm Interswitch.

This marks the fourth exit move by Helios within eight months. Earlier this year, it had pared its stake in Nigerian gas distributor Axxela.

LeapFrog Investments and Tana Africa Capital said Thursday they are investing in Interswitch, one of Africa’s leading technology-driven companies focused on the digitisation of payments. The investors did not disclose the deal value but given their average ticket size, the joint deal could be in the $100-150 million range.

Karima Ola, partner and head of Africa financial services at LeapFrog, said: “This investment by LeapFrog affirms the formidable talent at Interswitch, and how well-placed it is to seize the significant opportunity in Africa’s evolving digital payments landscape.”

Mark Tindall, Managing Director and CEO, Tana Africa, said: “Interswitch has developed a strong position at the nexus of Nigeria’s payments ecosystem, underpinned by an offering which is primed for continued growth.”

The investment includes a primary infusion of cash as also a secondary stake purchase. Ignite Holdco, a special purpose vehicle owned by Helios Investment Partners and TA Associates, are believed to have sold some stake. But it will remain the largest shareholder in the business following the transaction.

Founded in 2002 by Mitchell Elegbe, Interswitch disrupted Nigeria’s traditional cash-driven payments system, introducing electronic payments processing and switching services to the market. Currently, Interswitch operates two flagship brands: Verve, a debit card scheme operating across Africa, and Quickteller, a popular multichannel consumer and business payments platform.

Helios had bought a majority stake in the company in 2011 with Adlevo Capital, a technology-oriented private equity firm focused on Africa, joining as a co-investor.

In 2017, it sold a minority stake in the business to global PE firm TA Associates, which was the latter’s first Africa deal. Two years later, Visa picked up a stake of 20% in Interswitch at a valuation of $1 billion. That deal too spelled a partial exit for Helios.

Interswitch has been looking to go public for the last few years but those plans have not progressed. Some believe that entry of a strategic investor in the form of Visa has also affected those plans.

Mitchell Elegbe, Founder and Group Chief Executive of Interswitch, said: “The evolution of fintech in Nigeria and the broader sub-Saharan region has been driven by the need to solve challenges and barriers that exist within the traditional financial system. Interswitch was born from the need to develop solutions that match the unique needs of local customers and merchants.”

Vivek Sinha

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