Nigerian digital payments firm Interswitch confirmed it has reached unicorn status after Visa acquired a minority equity stake in the firm. Interswitch hits $1billion valuation with Visa investment, the investment makes Interswitch one of the most valuable African fintech businesses. The Visa investment could create the first of two market distinctions for Interswitch — as it shouldn’t change the Lagos-based company’s plans to go public.
Interswitch did not reveal the amount of Visa’s investment and would not confirm Sky News reporting Monday that pegged it at $200 million for 20%. Whatever the exact number, Interswitch’s confirmation of a $1 billion valuation marks another milestone in African tech.
Only one VC-backed startup turned the later-stage company on the continent — e-commerce venture Jumia — has generated enough revenue and capital to achieve a ten-figure valuation. For the near to medium-term, Interswitch could stand as Africa’s sole tech-unicorn, as Jumia’s volatile share-price and declining market-cap since an April IPO have dropped the company’s worth below $1 billion (for now).
Founded in 2002 by Mitchell Elegbe, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly paper-ledger and cash-based economy. The company now provides much of the rails for Nigeria’s online banking system that serves Africa’s largest economy and population. Interswitch offers a number of personal and business finance products, including its Verve payment cards and Quickteller payment app.
From its home-base of Nigeria, Interswitch has expanded its physical presence to Uganda, Gambia and Kenya. Interswitch also sells its products in 23 African countries and launched a partnership in August for its Verve cardholders to make payments on Discover’s global network.
Visa and Interswitch are touting the equity investment as a strategic collaboration between the two companies, without a lot of detail on what that will mean.“The partnership will create an instant acceptance network across Africa to benefit consumers and merchants,” was the characterization offered in a press release.
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