Investment fund makes foray into African fintech space
By Nsikan Ikpe
The Rise Fund, a global impact investing fund managed by growth equity platform TPG Growth, has announced that it has signed an agreement to acquire a stake in Cellulant, a leading digital payments provider that reaches 40 million people across 11 African countries. The Rise Fund is investing alongside Endeavor Catalyst, Satya Capital, Velocity Capital & Progression Africa.
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.
“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,” said Bill McGlashan, CEO and co-founder of The Rise Fund. “We’re excited to invest in African entrepreneurs like Ken and Bolaji to help them grow their businesses and expand their impact on society. Cellulant is a perfect partner for The Rise Fund’s first investment in Africa.”
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 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,” said Yemi Lalude, Managing Partner for TPG in Africa. “As more and more smartphones come online across Africa, Cellulant makes it easy for customers to increase their incomes.”
Cellulant offers the opportunity to create transformational growth for African economies by expanding financial inclusion on a continent where nearly two-thirds of the population do not have a bank account. This includes easy-to-access digital payment solutions, interoperable 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.
“Payments in Africa are not a novelty. 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,” said Ken Njoroge, Cellulant co-founder and Group CEO.
“With this new capital and as part of our scaling up strategy, we are leveraging on the growing mobile penetration trend in Africa to broaden our reach and extend our payments ecosystem across the continent. We are scaling up our existing payments products in the agriculture sector, digital banking and internet payments; as well as introducing consumer-focused products to complement the enterprise products we already have. This will allow us to increase access to payments for the millions of Africans who are still unbanked, despite the financial inclusion revolution,” added Bolaji Akinboro, Cellulant co-founder and CEO of Cellulant Nigeria.
“We’re thrilled to have Endeavor Catalyst joining this round for Cellulant,” said Linda Rottenberg, CEO of Endeavor. “With Cellulant, Ken, Bolaji and team are building a great example of something we hope to see much more of in the years ahead: true ‘scale-ups’ in Africa!”
The Rise Fund, Satya Capital and Endeavor Catalyst join Cellulant’s existing shareholders Velocity Capital Private Equity, Progression Capital Africa Limited and TBL Mirror Fund. Representatives from The Rise Fund will also join Cellulant’s Board of Directors, leveraging the firm’s experience, deep sector knowledge, operational resources, and global experience to drive increased value creation for the business and its mission.
This investment will also help scale existing Cellulant products, like Agrikore. Agrikore is a mobile blockchain-based platform that has served more than 7 million farmers across the continent, better connecting them to the market and helping them sell their goods to a diverse range of buyers more easily. It also expands access to government subsidy programs to help reduce costs for farmers, increase their yields, and raise incomes.
Magister Advisors served as transaction advisors to Cellulant, and Orrick and KPMG provided diligence and review to The Rise Fund in the transactions.
Cellulant is the leading one-stop digital payments company in Africa, for Africa by Africans; providing the glue connecting everyone to everything, every day. The company is growing to fix the continent’s payments problems by connecting 700m mobile users to payments that power their daily lives. Cellulant’s belief in providing solutions to everyday challenges across Africa has led to digitizing payments end to end for various value chains and as a result providing increased transparency and broader reach within a single mobile platform for financial sector players. The platform 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% (17M) of the unbanked farmers in Africa. Cellulant debuted operations in Kenya and Nigeria in 2004 and has grown to operate across 11 African markets, including: Zambia, Ghana, Zimbabwe, Tanzania, Uganda, Botswana, Mozambique, Malawi, and Liberia.
On its part, The Rise Fund is the world’s largest global fund committed to achieving measurable, positive social and environmental outcomes alongside competitive financial returns —what we call “complete returns.” The Rise Fund is managed by TPG Growth, the global growth equity and middle market buyout platform of alternative asset firm TPG. The Rise Fund is led by a group of influential thought leaders with a deep personal and professional commitment to driving social and environmental progress. The board includes: Bill McGlashan, TPG Growth Founder and Managing partner; Bono, Jeff Skoll, Mo Ibrahim, Laurene Powell Jobs, Anand Mahindra and Pierre Omidyar. The Rise Fund’s objectives align with the U.N.’s Sustainable Development Goals. The Rise Fund invests in education, energy, food and agriculture, financial services, growth infrastructure, healthcare, and technology, media, and telecommunications companies that deliver complete returns.
Bolaji Akinboro, Co-founder, Cellulant