Nigeria: Mastercard injects $200 million into MTN’s fintech venture

Mastercard has successfully acquired a minority stake in MTN’s financial technology arm, MoMo, six months after announcing the plans.

MTN has finalized a “definitive agreement” with Mastercard for a minority investment of up to $200 million (R3.8 billion) into MTN Group Fintech at a valuation of $5.2 billion (R99 billion) on a cash and debt-free basis.

The telecommunications firm stated that the transaction, which falls outside the categorization of the Johannesburg Stock Exchange (JSE) listings requirements, was initially disclosed on August 14, 2023, and is subject to customary closing conditions.

MTN Group president and Chief Executive Officer, Ralph Mupita, recently indicated that the company was looking to sell about a 30 per cent stake in the fintech business.

MTN’s fintech structure includes mobile money platform MoMo, insurance offerings, airtime lending and e-commerce, as well as its network services.

In its interim financial results for the six months ended June 2023, MTN, Africa’s largest mobile operator, disclosed that its fintech business experienced significant growth, with revenue increasing by 21.7% year-over-year. This growth was primarily driven by expansions in the wallet (+20.7%), payment and e-commerce (+54.9%), and remittance (+78.9%) sectors.

The Mastercard transaction comes as MTN Group is expanding its fintech business, putting the telecoms company on a solid footing, as it prepares to separate its financial services division.

According to the firm, these agreements further enhance the broader commercial partnership between the telecommunications group and Mastercard. They aim to bolster the ongoing development and expansion of technology and infrastructure, fostering financial inclusion across the African continent.