Airtel Africa, a subsidiary of India’s Bharti-Airtel, has announced a $200m investment in its mobile money division by Qatar Holding LLC, an affiliate of the Qatar Investment Authority (QIA).
This follows a $200m investment by TPG 's Rise Fund, an organisation that specialises in social impact, growth, and venture capital, in March. It had also gotten a $100m investment from Mastercard in Airtel Mobile Commerce BV (AMC BV) in April.
AMC BV is a subsidiary of Airtel Africa that functions as the holding company for several of the company's mobile money operations across 14 African countries.
The mobile money division is one of the largest financial services providers on the continent. It enables users to make mobile payments, international money transfers, borrow money, and use virtual credit cards.
Per TechCrunch, the investment will be used to reduce its debt and invest in network and sales infrastructure in the respective operating countries.
The investment deal will be completed in two tranches, with the first $150m probably in August and $50m at a yet unspecified date.
Airtel Africa says that QIA will hold a minority stake in the company while it retains the majority. However, what’s different in this investment deal is that QIA now has the authority to appoint a director to the board of directors of AMC BV, as well as "certain customary information and minority protection rights."
We reported that the telecommunications company recorded significant growth in revenue between March and December 2020; however, profit after tax dropped.
Comparing revenue from Q1 2020 with Q1 2021, Airtel saw a significant increase in revenue at $1.03b, dwarfing Q1 2020’s revenue of $899m by 21.7%.
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In its Q1 financial report, Airtel’s Mobile Money accounted for the least revenue at $110m. However, it surpassed the $83m of Q1 2020 by 38.7%. Its mobile money customer base went from 18.3 million in Q1 2020 to 21.7 million in Q1 2021, an 18.5% increase.
In February 2021, Airtel Africa made it known that it wanted to sell a minority stake in AMC BV to raise cash and sell off some assets.
In subsequent months, the telco giant sold off telecommunication towers in Madagascar and Malawi to Helios Towers for $119m and raised $500m from outside investors. And in June, the telco giant announced the sale of its Tanzanian tower portfolio for $175m.
Mansoor bin Ebrahim Al-Mahmoud, QIA CEO, believes that Airtel Money is critical for economic activity facilitation, particularly for customers who lack access to traditional financial services.
He also believes that the Sovereign Wealth Fund's investment in Airtel Africa will contribute to sub-Saharan Africa's financial inclusion.