The Rise Fund, the global impact investing platform of alternative investment firm TPG, will invest $200 million in Airtel Mobile Commerce, a subsidiary of Airtel Africa.
Airtel Mobile Commerce is currently the holding company for several of Airtel Africa’s mobile money operations; and is now intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.
The transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis. The Rise Fund will hold a minority stake in Airtel Mobile Commerce, while Airtel Africa will have the remaining majority stake.
Airtel Africa aims to list the mobile money business within four years. The group is in discussions with other potential investors to offer stake in Airtel Money business.
The proceeds from the transaction will be used to reduce Group debt and invest in network and sales infrastructure in operating countries.
Airtel mobile money service generated revenue of $110 million ($440 million annualised), and EBITDA of $54 million ($216 million annualised) at a margin of 48.7 percent in Q3.
Raghunath Mandava, CEO of Airtel Africa, said: “Our markets afford market potential for mobile money services to meet the needs of the tens of millions of customers in Africa who have little or no access to banking and financial services, and this demand is driving growth.”