Egyptian financial services group EFG Hermes’ consumer finance unit valU, a Buy-Now, Pay-Later (BNPL) fintech platform in the MENA region, said the Saudi Alhokair Family has entered into an agreement to acquire a 4.99% stake.
The deal has been struck at the same pre-money valuation at which Amazon invested recently. Last month, the global ecommerce and technology giant agreed to invest in EFG Hermes as part of a wider partnership with valU. That deal valued valU at $235 million.
Fawaz Abdulaziz Alhokair, Salman Abdulaziz Alhokair, and Abdul Majeed Abdulaziz Alhokair, together the Alhokair Family, is buying the minority stake for $12.4 million, at a post-money valuation of $247.4 million.
The transaction comes on the heels of valU’s entry into the Saudi market last week through FAS Finance, a joint venture with FAS Labs. valU owns 35% of the JV while FAS Labs owns 65%.
valU claims it serves more than 574,000 app clients in Egypt, the Arab world’s largest consumer market. In its home country, valU boasts over 5,000 points of sale locations catering to customers transacting in home furnishings, electronics, home appliances, fashion, auto spare parts, healthcare, education, and travel, among other services.
With its entry into the Saudi market, valU will be present across Alhokair’s retail network of more than 1,000 stores as well as online on the VogaCloset and monobrand websites, including 14 in Saudi Arabia. It will also extend to other vendors, retail networks, and merchants to include and cover the entire Saudi market.
A few weeks ago, valU entered into an agreement with Amazon for the provision of consumer financing as a payment method on the ecommerce company’s Egyptian platform.
Under the terms of the agreement, valU will make some of its consumer financing products available to customers on the ecommerce platform, providing these customers the option to split the total cost of purchases into multiple payments by using valU.
EFG Hermes and Amazon also entered into an option agreement whereby the American firm has agreed to acquire $10 million in the Egyptian company’s GDRs with the option to replace that investment into valU at a future date.
Amazon can exercise the option before or upon the occurrence of a liquidity event at the level of valU. Such an event could be in the form of an independent investment involving third-party investors, a sale, or an initial public offering.