Nigerian Fintech Company Interswitch May Become Africa’s First Public Startup Unicorn


Africa could be getting its first unicorn startup if we are to go by the rumors that are currently circulating get fulfilled. Nigerian digital payments and commerce company Interswitch will likely go public on the London Stock Exchange (LSE) in 2016, sources confirm.

The Lagos based fintech firm, majority owned by private equity group Helios Investment Partners, provides much of Nigeria’s digital finance infrastructure. Founded in 2002, Interswitch’s product platforms process the bulk of the country’s growing volume in electronic bank, government, and corporate financial transactions. In personal finance, 32 million consumers use the company’s Verve chip and PIN cards, while its Quickteller digital payment app processed $2.4 billion in transactions.

On a pending IPO, Interswitch CEO and founder Mitchell Elegbe confirmed, “a dual-listing on the London and Lagos stock exchange is an option on the table. But “It’s not the only one,” he explained, “to facilitate potential exits” by the company’s private equity investors. “We are also looking at a possible trade sale,” Elegbe said on a telephone call from Lagos.

Though Interswitch’s CEO would not confirm a 2016 IPO, two sources said the company’s listing is imminent.

“They’ve already selected the ibankers and will likely go public sometime between Q2 to Q4 at (or close to) a $1 billion dollar valuation–roughly two times revenues,” said Eghosa Omoigui, Managing Partner of EchoVC, a Silicon Valley fund investing in African startups.

Any billion dollar liquidity event, whether an IPO or trade sale, would mark a milestone for African tech, which to date has produced only a handful of exits and no major public listing.

Interswitch continues to build digital finance market share in Nigeria and broader Africa. It operates in five African countries and recently launched its Verve payments product after acquiring Kenya’s Paynet. Interswitch CEO Elegbe said a possible IPO would also support the company’s plans to expand into additional African countries.

As for Interswitch possibly becoming Africa’s first tech unicorn, “It’s obviously good for the market to demonstrate African tech companies can generate that level of revenue,” said EchoVC’s Omoigui. “On the question of exits and IPOS, we’ve gone from ‘if’ to ‘when’ to potentially ‘who next?’ Minting our first fintech unicorn will make a lot of VC investors take African tech much more seriously.”

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