Of the 300 million monthly active mobile money users worldwide, 159 million are in Sub Saharan Africa. That’s how big the mobile money industry is in the sub-region and telcos have been betting big on it for years.
The focus on mobile money is important at a time when the revenues from voice are declining. The thinking is that data revenue and mobile money revenue will be the major revenue lines for Africa-focused telcos.
For Airtel Africa, which operates its mobile money service in 14 countries across the continent, the signs are already promising. Mobile money brought in revenues of $110 million in Q4 2020 for Airtel, which is 10% of revenue.
More importantly, Airtel has created a holding company for its mobile money business called Airtel Mobile Commerce BV (AMC BV) and wants the hold co to possibly go public in the future.
But right now, it is selling minority stakes in the company. It has now sold 11.25% of AMC BV; first a 7.5% stake to US private equity firm, TPG for $200 million and then a 3.75% stake to Mastercard for $100 million.
The sale valued the business at $2.6 billion. For most people, the question is, why sell stakes in a business the company is betting on for the future?
I answered the question in this article; read it here.