TA Associates, a world leading growth private equity firm, today reported it has acquired a minority equity interest in Interswitch. Interswitch is an Africa-focused integrated digital payments and commerce company. Financial terms of the transaction were not disclosed. Helios Investment Partners will remain the majority shareholder of Interswitch.
Founded in 2002, Interswitch is active across the entire payments value chain. A recognized leader in the payments space in Nigeria, the company owns and operates the country’s principal domestic debit card scheme, Verve, as well as serves as a third-party transaction processor for many of Nigeria’s largest banks. In addition, the company offers a number of B2B electronic payment services to public and private sector organizations and businesses, including government entities, hospitals, telecommunications companies and utilities, and also operates Quickteller, the leading B2C bill payments and digital commerce platform in Nigeria. Through add-on acquisitions, Interswitch also operates in Kenya and Uganda.
“By strategically partnering and aligning its interests with key banks, merchants and other institutions, Interswitch has become a leading provider for payments solutions in an emerging and rapidly growing market in Nigeria,” said Naveen Wadhera, a Managing Director at TA Associates who will join the Interswitch Board of Directors. “Interswitch is a unique, high quality and strategic asset located in one of Africa’s leading economies. We are delighted to expand upon our longstanding presence within the global payments industry through our partnership with the management team and Helios, and look forward to helping Interswitch continue to expand its business.”
“Since our founding, we have been committed to creating social, environmental and economic value by facilitating trade through forms of exchange that are secure, convenient and consistent,” said Mitchell Elegbe, Founder, and Managing Director at Interswitch Limited. “Keeping that in mind, we believe a partnership with a growth private equity firm such as TA Associates will prove highly beneficial to our ongoing efforts of consolidating the impact of our services and increasing financial inclusion for all. We welcome TA as our newest investor and look forward to benefitting from their experience in the payments space and their valuable insight and support.”
“With our investment in Interswitch in 2011, we backed a talented founder and management team, and have worked hand-in-hand with them to institutionalize the business and build the platform, spearheading growth not only in their core processing and card scheme businesses but also into mobile payments, expansion into East Africa and the launching of products and services to address the unbanked – driving financial inclusion. As the majority investor in Interswitch, we look forward to working with the company’s first-rate management team and TA Associates to drive the next phase of the company’s growth,” said Alykhan Nathoo, Partner at Helios Investment Partners.
The digital payments evolution is in the early stages of development in Nigeria, with cash used for 99% of transactions according to McKinsey & Company, versus approximately 50% for developed markets in North America and Europe. Despite the young market, its continent-leading population and sizeable economy underpin the size of the Nigerian payments opportunity. Based on estimates from McKinsey & Company, Interswitch occupies a leading position in the emerging marketplace, especially in debit cards, which comprise 99% of all cards in Nigeria.