Global payments giant Visa Inc plans to acquire a significant minority stake worth $200 million for 20 percent stake in Interswitch, Nigeria’s largest digital payments platform Interswitch, a deal that will give Visa a valuation of $1 billion and see it becoming the continent’s latest technology ‘unicorn’. The is a major benefit for Visa as a cornerstone investor ahead of a proposed initial public offering slated for the London Stock Exchange in the first half of 2020.
According to Interswitch, “The investment makes Interswitch one of the most valuable African fintech businesses with a valuation of $1 billion.” Founded in 2002, Interswitch is one of the largest Africa-focused electronic payments and infrastructure companies, with point-of-sale terminals, online consumer payment platforms and its own card, Verve. The company pioneered the infrastructure to digitize Nigeria’s then predominantly paper-ledger and cash-based economy debit card and has 19 million active cards.
In 2016, Visa planned an Initial Public Offering but it was scrapped due to a recession in Nigeria. An investment by Visa is the latest in a string of moves by global payments companies backing African fintech companies seeking high-growth bets in emerging markets. However, Interswitch is not the first Africa-focused tech company to achieve the unicorn status. In April, Nigeria’s number one e-commerce company, Jumia, led by a mix of international executives and investors listed for over $1.4 billion.
An eventual IPO for Interswitch could see the company’s majority shareholder, Helios Investment Partners, sell its stake as Helios has already floated a separate namesake business, Helios Towers, in London in recent weeks.