Egyptian fintech MNT-Halan enters unicorn club; Apis books part-exit
MNT-Halan, an Egyptian fintech venture that raised $120 million from Apis Partners, Development Partners International (DPI) and Lorax Capital Partners among others a little over a year back, said Wednesday it has scooped up $140 million via debt and is the process of raising $60 million in equity.
This comes a week after The Capital Quest reported that the fintech had roped in Chimera as an investor and was getting another investor. A Limited Partner to at least five existing investors in MNT-Halan—DPI, Lorax, Apis, Wamda and DisrupTech—is likely to bring bulk of this additional money.
Chimera Abu Dhabi has invested more than $200 million in equity in exchange for over 20% of the company, catapulting MNT Halan into the unicorn club of startups with a valuation of $1 billion or more. This was via a secondary purchase of shares from existing investors including Apis Partners.
Apis will be selling down a third of its stake held via its second fund and post-transaction will still retain a 7% stake in MNT-Halan. This comes soon after Apis signed off from Sun King as part of another secondary deal.
Separately, MNT-Halan parent GB Auto had sold around 7.5% to Chimera. Names of the other sellers stand undisclosed.
Seif Fikry, CEO of Chimera Abu Dhabi, said, “MNT-Halan’s upward trajectory and momentum reflect the management team’s realization of its extraordinary vision to transform a high touch business by seamlessly infusing an unparalleled proprietary tech platform while increasing product depth for its target customer segment.”
MNT-Halan Founder and CEO, Mounir Nakhla, added, “Having the backing of Chimera Abu Dhabi is of significant support to the execution of our strategy. The timing of the transaction is also a testament to our ability to significantly increase our revenues and open new revenue streams while growing our bottom line, despite the macro-economic situation.”
The company also announced two securitizations totaling $140 million through subsidiaries Tasaheel Microfinance Company and Halan Consumer Finance with Commercial International Bank (CIB), Egypt’s largest private sector bank.
Tasaheel has securitized $100 million of its loan book in the second issuance of its securitization program. Halan Consumer Finance has securitized $40 million of its loan book in its first securitization since its start of operations in 2021. Both issuances were over-subscribed. The combined securitized loan books consist of 246,000 contracts and a cash pay-back ability. The proceeds will fuel the company’s growing loan book, considering the increasing demand in light of the current inflationary environment. MNT-Halan has capacity to further securitize up to $250 million in its securitization program.
Both securitizations are divided into four tranches, each of which have been rated Prime 1 for the first three and A for the fourth by MERIS (Middle East Rating & Investor Service). In addition to CIB, participating regional and local financial institutions included Abu Dhabi Commercial Bank, Al Ahli Bank of Kuwait, Al Baraka Bank, Arab Africa International Bank, Agricultural Bank of Egypt, ABC Bank, NI Capital, National Bank of Egypt and the Housing and Development Bank.
White & Case, Shearman and Sterling, Lexence, and Matouk Bassiouny & Hennawy served as legal advisors on the investment transactions. CIB served as financial advisor and general arranger of the securitizations with National Bank of Egypt serving as co-financial advisor and underwriter.
Arab Africa International Bank and NI Capital served as underwriters. Matouk Bassiouny & Hennawy served as legal advisors on the securitizations.
MNT-Halan’s digital solutions include lending, ‘buy now and pay later’ (BNPL), e-commerce, payments, and on-demand logistics. Its proprietary fintech ecosystem connects customers, vendors and micro-enterprises through its consumer-facing and merchant apps, Halan Neuron (distributed lending and payment processing software), and wallets and cards.
In June 2021, MNT Investments, a financial services subsidiary of Egypt’s GB Auto backed by DPI, had said it was bringing super app Halan under its fold. MNT and Halan entered into a share-swap agreement, but didn’t share details of the transaction. This essentially meant that Halan shareholders received a stake in MNT.
Halan was co-founded by Mounir Nakhla, former IBM Egypt executive Ahmed Mohsen and former Careem executive Mohamed Aboulnaga. Nakhla is Halan’s CEO, Mohsen is CTO and Aboulnaga is chief commercial officer.
Nakhla is a serial entrepreneur who founded Egyptian microfinance company Tasaheel in 2015. He also set up Mashroey, an asset-based microlender that focused on two- and three-wheelers, five years before.
Both Tasaheel and Mashorey were co-created with Ghabbour Auto (GB Auto) and are now housed under MNT.