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Airtel Money is betting on digital payments and financial services to drive revenue growth across Africa, the fintech company’s CEO told Semafor ahead of what looks set to be London’s largest initial public offering in recent years.
The mobile money arm of telecoms group Airtel Africa, which last week announced its intention to pursue an offering on the London Stock Exchange, operates in 13 African countries. It is reportedly looking to raise at least $800 million from the sale of shares by existing shareholders, which would give it a market capitalization of between $8 billion and $9 billion.
Airtel Money’s Chief Executive Officer Ian Ferrao, in an interview, said the company’s revenue mix had shifted in recent years to digital payments and transfers, away from depositing and withdrawing cash through its network of agents, branches and kiosks. Customers use the mobile money platform to pay bills, buy goods, transfer funds to people, and arrange microloans.
“We’ve really put a tremendous focus on the payments and transfers side of the business because that’s higher quality revenue, better margin,” he said.
The executive added that financial services — including lending, savings, and insurance products — made up only 4% of the business but were growing fast. Ferrao pointed to “wealth tech”, allowing customers to buy and sell shares on local stock exchanges, as an area in which the company sought to innovate.
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Airtel Money is the third-largest mobile money operator in Africa by transaction value, behind Safaricom’s M-Pesa and MTN’s MoMo. Of the countries in which it operates, Ferrao pointed to DR Congo as one of the company’s fastest growing markets. He also cited Chad and Niger as underpenetrated markets that showed promise.
The offering is expected to be the largest in the UK since 2021. Ferrao said that, in the medium term, it would offer “flexibility” if the company wanted to expand into new countries and or pursue consolidation opportunities.
Ferrao said the deal would make the company the first major fintech listed on a global exchange, representing sub-Saharan Africa. “If anybody wants exposure to the continent, we will be a great asset to give exposure to the continent,” he said.
OPay, a Chinese fintech company focused on Nigeria, is looking to go public in the US in a process that would value the company at around $4 billion. And Flutterwave, Africa’s most valuable fintech, recently purchased open-banking platform Mono Technologies Nigeria in a bid to strengthen its case for a potential IPO.
Step Back
Details of Airtel Money’s offering — such as the deal size and price range — are set to be published in October, the company said.
Bharti Airtel, the telecoms company founded by Indian billionaire Sunil Bharti Mittal, spun out and listed its Airtel Africa subsidiary on the London Stock Exchange in 2019 at an IPO valuation of $3.9 billion. Airtel Africa, which has grown significantly since then, is now worth about $13 billion in total market capitalization.
London-listed Airtel Africa currently owns about 78% of Airtel Money, while Chimetech Holding, Mastercard, and Qatar Investment Authority are among the firms holding minority stakes.
The International Finance Corporation, the World Bank’s private investment arm, has agreed to buy $90 million of shares from existing shareholders.
Notable
- The listing could provide a boost for London’s stock market, which has seen companies move away in recent years, but it does not mark a “definitive” end to the city’s listings drought, wrote journalist Nils Pratley in The Guardian.