Mena fintech Tpay returns 100% of value in investor exit

Cayman Islands-based technology investment firm A15 has sold its 76 per cent stake in Egyptian fintech company Tpay Mobile – the first major fintech exit for the Middle East and North Africa region.

The stake was sold for an undisclosed sum to Helios Investment Partners, one of Africa’s biggest private equity firms with offices in London and Nairobi.

“A15 and Tpay’s management have built an outstanding mobile payments platform that is profitable and still has a lot of room for growth in Africa and beyond given its applicability to a wide range of payment types,” said Babatunde Soyoye, co-founder and managing partner of Helios Investment Partners, in a statement on Monday.

“This partnership will expedite Tpay’s strategic growth plans and we are on track to double our year-on-year revenue in 2019,” added Sahar Salama, co-founder and chief executive of Tpay, without revealing current revenues. Under the transaction, A15 and Tpay’s executive team will remain invested in a total of 24 per cent of the company, the statement added.

Tpay launched in Egypt in 2014 as the first open mobile payments platform in Mena. Today, it has an 80 per cent share of the direct operator billing market with 673 million users across 16 countries in the region, the company said.

The number of active digital content subscriptions set up through the platform has risen at an annual growth rate of 149 per cent since 2015, the company said, and Tpay has processed 622 million transactions since its launch, through partnerships with 33 mobile operators.

The company also has strategic partnerships with GooglePlay, Wargaming, NetDragon, CrossFire, Opensouq, MBC, iFlix, Abu Dhabi Media and Dubai Channels Network, among other regional and international players.

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The global direct operator billing industry is expected to register 23 per cent growth each year from 2018 to 2022, according to the latest figures from Juniper Research. In the Middle East, the sector is becoming increasingly popular as companies seek to broaden payment options for the estimated 86 per cent of adults in Mena who do not have a bank account, according to a study from payments provider Payfort’s 2017 State of Fintech report. The region saw a 23 percent increase in online payments in 2015 illustrating the fast paced growth of the fintech.

The Mena region also has among the highest smartphone penetration rates in the world, presenting opportunities for new mobile platforms.

A15 said through the transaction it becomes the first fund in Mena to create a ‘dragon’ company from one of its investments. A ‘dragon’ is a term used in the start-up and venture capital world to describe an investment that returns the entire value of the fund when exited.

“In this case, TPAY returned a multiple of the value of the entire A15 Fund to its investors, a liquidity event that is very rare in the global tech investment space and a first of its kind in the MENA region,” A15 said in the statement.