Interswitch has received $110 million in joint investment from LeapFrog investments and Tiana Africa Capital, according to a statement released by the two private investment companies on Wednesday. The digital payment company is Africa’s second unicorn, and its latest investment will help it to scale digital payment services across the continent.
Founded in 2002, Interswitch disrupted Nigeria’s cash-driven economy by introducing electronic payments and switching services. When Interswitch entered Nigeria’s financial scene, it was estimated that there were less than 200,000 Nigerians with internet access, with many still adjusting to their newly acquired mobile phones. Despite the existence of other e-payment services that had received operating licenses 6 years before Interswitch was established, Interswitch became Nigeria’s first e-payment service to be connected to all banks. Today, it provides payment rails for Nigeria’s online banking system and is known for its consumer-facing products: Quickteller, an online consumer services platform for bill payments and airtime purchases, and Verve, its pan-African debit card scheme, which is available in 185 countries via its partnership with Discover.
Interswitch’s last funding round was in 2019 when VISA acquired a 20% stake, valued at $200 million, and helped it become Africa’s second unicorn. Even then, its products: Verve and Quickteller, were already selling in 23 African countries and had a physical presence in Gambia, Uganda and Kenya. Today, at a $1 billion valuation, Interswitch is touted as one of Africa’s biggest electronic payments and infrastructure companies.
Amidst conversations about the proliferation of fintech companies in Nigeria and Africa, Interswitch is strengthening its pan-African expansion strategy which includes acquiring new customers and expanding financial inclusion on the continent. At last count, Africa had 350 million unbanked adults and recent data from the Global System for Mobile Communications (GSMA) shows that 70% of the world’s $1 trillion mobile money market is in Africa. It is no longer news that the future of banking is in Africa; Interswitch, a pioneer in the African mobile money space, doesn’t want to be left behind.
“The evolution of fintech in Nigeria and the broader sub-Saharan region has been driven by the need to solve challenges and barriers that exist within the traditional financial system,” Interswitch Group CEO Mitchell Elegbe said in a statement. “Interswitch was born from the need to develop solutions that match the unique needs of local customers and merchants.”
Reiterating Interswitch’s plans to replicate its financial disruption in other African countries, LeapFrog Investments’ partner and head of Africa financial services, Karima Ola, said that company “has been disrupting the cash economy, driving digital payments and promoting equitable financial inclusion in Nigeria for two decades. This investment by LeapFrog affirms the formidable talent at Interswitch, and how well-placed it is to seize the significant opportunity in Africa’s evolving digital payments landscape.”