Global payment group, Visa has concluded plans to take up 20 percent stake in Nigeria’s Interswitch – a financial technology (fintech) company – ahead of its Initial Public Offering (IPO) at the London Stock Exchange (LSE) in the first quarter of 2020.
The deal that will be announced this week will see Visa investing $20 million for 20 percent stake in return from Interswitch.
This development will see Visa becoming the cornerstone investor in Interswitch.
This agreement is comes a few months after rival payment platform, MasterCard, invested $300 million in Dubai-based Network International ahead of its IPO on the same exchange.
Interswitch, with 19 million cards active on its network, reportedly generates annual revenue of N30 billion, suggesting it is valued at 10 times its revenue – which estimated to be $1 billion.
Interswitch is also now valued higher than FBNH (N208 billion), UBA (N225 billion) and Access Bank (N327 billion). Zenith Bank still owns a 5% stake in Interswitch and is currently valued at N538.4 billion.
The rush to build stakes in African businesses by Visa and Mastercard is being driven by a desire to take advantage of established platforms in markets that are both fast-growing and under-penetrated.