US investors back Kenya’s Cellulant to ride e-wallet surge
May 15, 2018—Last year, Mckinsey, the widely respected international business consultants, said online shopping across Africa is expected to account for up to 10% of retail sales or an estimated $75 billion by 2025 as more people gain access to the internet.
The trend is attracting increasing investor interest. Early this week , The Rise Fund, a global impact investing fund, announced that it has signed an agreement to acquire a stake in Nairobi-based Cellulant Corporation, a fast-growing digital payments provider that reaches 40 million people across 11 African countries including Uganda. Using mobile technology, Cellulant prompts, collects, settles and reconciles payments in real time.
Ken Njoroge, the Cellulant co-founder and Group CEO said, “With two thirds of Africans unable to access a bank account, we believe that building a connected payments infrastructure is the foundation of solving real challenges and accelerating Africa’s growth and development. This investment from TPG Growth’s The Rise Fund will enable us to build a world class payments team that can unlock our next phase of growth. This involves not only entering new geographies across the continent, but also consolidating our presence in existing markets,”
The Rise Fund, which is managed by TPG Growth, the global growth equity and middle market buyout platform of alternative asset firm TPG, is investing alongside Endeavor Catalyst and Satya Capital. Actual figures were not provided, but TPG Growth is backed by the resources of TPG, which has more than $73 billion of assets under management.
The deal is the largest of its kind dedicated solely to Africa’s fintech and payments space, competitively positioning Cellulant in a fast-growing sector where it already enjoys an early mover advantage.
Bill McGlashan, CEO and co-founder of The Rise Fund said, “Across Africa, expanding easy-to-use and low cost mobile banking offers immense potential for impact, and Cellulant is at the leading edge of that work.”
Cellulant’s digital payments platform delivers connected, flexible payment options for consumers and businesses, and works with financial institutions, governments and mobile network operators to increase transparency and expand their reach in Africa.
Building on a business model that first debuted in Kenya and Nigeria in 2004, the company has since expanded its services across 11 African markets, including: Zambia, Ghana, Zimbabwe, Tanzania, Uganda, Botswana, Mozambique, Malawi, and Liberia.
Cellulant processes 12% of Africa’s digital payments with coverage of 50% of banks in Africa; catering to 10% of Africa’s banked population and providing an eWallet solution for 15% (17 million) of the unbanked farmers in Africa.
Yemi Lalude, the Managing Partner for TPG in Africa said, “Cellulant occupies a unique position in the fintech ecosystem in Africa, with the potential to offer increased access, savings, and income to tens of millions of users across the continent. As more and more smartphones come online across Africa, Cellulant makes it easy for customers to increase their incomes.”
Cellulant offers easy-to-access digital payment solutions, inter-operable financial services, and mobile banking solutions that can help the unbanked open accounts, cut fees, and save for the future, as well as helping farmers and small and medium sized business owners expand their reach through improved financial services. More than 94% of Cellulant’s customer base was previously unbanked before they signed up.