TPG Capital, a global private equity investment firm based in San Francisco, USA, has made its first investment in Africa through the Rise Fund, an impact fund operated by private equity group TPG Growth.
The investment has led to a $47.5 million deal to purchase an unspecified stake in Cellulant, a digital payments provider. According to the Rise Fund, this is the largest deal including a fintech company that operates in Africa only. The deal also involves investment firms, Endeavour Catalyst and Satya Capital.
Yemi Lalude, TPG’s managing partner for Africa said: “Much of the [fintech investment] activity in recent times in Africa has been specifically in the consumer lending space. “This is different from that. What Cellulant has is a payment platform that enables people who have not had access to financial payments to get access in a way that is transparent.”
Cellulant, which was established in 2004 with operations in Nigeria and Kenya, now runs in 11 countries with 94 banks and seven mobile money platforms onboard building a customer base of 130 million. The firm deals with mobile payments and e-commerce.
Ken Njoroge, Cellulant co-founder and chief executive said the new capital will be used to expand operations into two more countries in 2018.
“The payment market on the continent is [worth] anywhere between $20bn and $40bn over the next couple of years while all of the fintech players in the market [currently] collectively generate a little shy of $2 [billion],” he said.
Lalude said TPG’s investments were “usually up to seven years, and this would be similar to that”. TPG created the Rise Fund in 2017, attracting some $2 billion in capital. The fund intends to be “committed to achieving measurable, positive social and environmental outcomes” while offering“competitive financial returns”.
Its board members include entrepreneur Richard Branson, singer Bono and Jeffrey Skoll, and the first president of online auction website eBay.
Lalude said the Rise Fund was attracted by many of Cellulant’s 40 million customers that did not have access to formal financial services before utilising the products and services offered by Cellulant.