Potential unicorn-to-be, Interswitch is said to be working on selling itself for a lot of money. But that hasn’t stopped the payments company from buying up other companies. The one it’s just acquired will have the African fintech industry buzzing. Reliable sources have informed TechCabal that Interswitch has acquired Vanso, a company that provides financial technology, mostly to banks, in a N15 billion buyout.
I would convert that to USD, but the exchange rate is currently doing weird things. Since you insist, that’s about $50 million, at parallel market rates.
From what we gather, it is a part cash, part stock deal for 100 percent of the company, and management staff will be staying on, making this an acqui-hire as well. Vanso’s investors include Verod Capital and undisclosed high net-worth individuals, who are said to have committed on aggregate, about $3 million. The 13 year old company was founded Dennis O’Brien and Idris Alubankudi Saliu, according to their website.
African fintech is currently white-hot. New companies and products are springing up, while the mature ones are consolidating and re-positioning. Some of the biggest exits Africa have seen have come from the fintech sector. Interswitch experienced its first major liquidity event when Helios acquired a majority stake in 2011 for $92 million. In the same year, Fundamo sold to Visa for $110 million in cash.
The Interswitch/Vanso deal is interesting for many reasons, some of which are not readily apparent. One obvious reason is that in its 13 years of existence, Vanso has built deep relationships with financial institutions across the continent. Its technology powers the mobile apps of at least five major banks in Nigeria. The only way to describe Interswitch’s history and relationship with banks is “complicated”. Acquiring Vanso certainly gives them a lot more leverage than some Nigerian banks would like.
Another draw for Interswitch would be Vanso’s technology stack and staff. Over the years, Vanso has built and executed on deep competences in internet banking, mobile payments and messaging.
Finally, if you care for bold hypothesis, it is possible that acquiring Vanso at this time makes Interswitch an even better acquisition target or can help it command a better IPO price. Interswitch appears to be actively exploring both options, and is said to be gunning for a billion dollar valuation, whichever way things shake out.