âThe investment makesÂ InterswitchÂ one of the most valuable African fintech businesses with a valuation of $1 billion,â Interswitch said in a release to TechCrunch.
TheÂ VisaÂ investment could create the first of two market distinctions for Interswitch â as it shouldnât change the Lagos based companyâs plans to go public.
âAn IPO is still very much in the cards; likely sometime in the first half of 2020,â a source with knowledge of the situation told TechCrunch on the background.
Interswitch did not reveal the amount of Visaâs investment and would not confirmÂ Sky News reportingÂ Monday that pegged it at $200 million for 20%.
Whatever the exact number, Interswitchâs confirmation of a $1 billion valuation marks another milestone in African tech.
Only one VC backed startup, turned the later-stage company on the continent â e-commerce venture JumiaÂ â has generated enough revenue and capital to achieve a ten-figure valuation.
For the near to medium-term, Interswitch could stand as Africaâs sole tech-unicorn, sinceÂ Jumiaâs volatile share-price and declining market-capÂ since an April IPO have dropped the companyâs worth below $1 billion (for now).
Founded in 2002 byÂ Mitchell Elegbe, Interswitch pioneered the infrastructure to digitize Nigeriaâs then predominantly paper-ledger and cash-based economy.
The company now provides much of rails for Nigeriaâs online banking system that serves Africaâs largest economy and population. Interswitch offers a number of personal and business finance products, including itsÂ VerveÂ payment cards and Quickteller payment app.
From its home-base of Nigeria Interswitch has expanded its physical presence to Uganda, Gambia andÂ Kenya.
Interswitch also sells its products in 23 African countries and launched a partnership in August for its Verve cardholders to make payments onÂ DiscoverâsÂ global network.
Visa and Interswitch are touting the equity investment as a strategic collaboration between the two companies, without a lot of detail on what that will mean.
âThe partnership will create an instant acceptance network across Africa to benefit consumers and merchants,â was the characterization offered in a press release.
Interswitchâs imminent IPO has been delayed for several years. CEO and founder Mitchell Elegbe told TechCrunch, âa dual-listing on the London and Lagos stock exchange is an option on the table,â in aÂ January 2016 call.
In subsequent years, Elegbe and other Interswitch executivesÂ named Nigeriaâs recessionÂ as a reason for the delay.
A number of stories have surfaced, including Bloomberg News reporting in July, that the company was poised to go public on the LSE.
TechCrunchâs source close to the matter offered the latest indication that Interswitch will list on a major exchange by mid-2020.
With possible exits for backersÂ Helios Investment Partners, TA Investments and IFC, Interswitchâs unicorn status and pending IPO could create more momentum for startup investment in Africa. VC to the continent has grown significantly over the last 5 years, but stands at just over $1 billion annually, perÂ Partech numbers.
Interswitch could also be in a stronger position to offer more capital directly to the continentâsÂ fintechÂ startups by reviving itsÂ ePayment Growth Fund.Â The venture arm made two investments in 2015 but then went largely quiet.
Source:Â Tech Crunch