Verdant Capital advises Nigerian payments company on its sale to MFS Africa
MFS Africa is acquiring Baxi to expand its network into Nigeria, Africa’s largest economy and perhaps its most fintech dynamic market. Nigeria is also the largest remittance market in Africa representing one-third of intra-Africa remittance flows, and is home to the largest number of SMEs.
Verdant Capital views the two businesses as highly complimentary: Baxi simplifies and integrates online and offline payments for SMEs and merchants in Nigeria through its omni-channel distribution network; MFS Africa simplifies cross-border payments, integrating payments via one hub. The transaction further extends Verdant Capital’s track-record of advising on transactions shaping the fintech sector in Africa.
The sale of Baxi is Verdant Capital’s fifth successful fintech transaction of the year, having advised Retail Capital, a tech-enabled SME-financier in South Africa on a $10 million capital raise; Zeepay, a pan-African digital remittance and mobile payments business on its $8 million series-A and on its acquisition of Mangwee in Zambia; and Tugende, a tech-enabled SME-financier in East Africa on its $10 million series A. The transactions cover West, East and South Africa.
Founded in 2014 by Degbola Abudu and Folu Majekodunmi, Baxi is one of Nigeria’s largest independent SME-focused electronic payment networks. Baxi provides a comprehensive range of services to the last mile including cash-in/cash-out, account opening, money transfer and bill payment. Through its network of more than 90,000 agents, Baxi processed over $1 billion in transactions in the first nine months of 2021. Following the close of the transaction, MFS Africa plans to build Baxi into a key node on its digital payment network, allowing customers to make regional and global payments to and from Nigeria. MFS Africa also intends to expand Baxi’s proposition for offline SMEs to select markets within MFS Africa’s footprint of 320 million mobile wallets across more than 35 African countries.
Strong agent networks are the crucial interface for fintechs to reach Nigeria’s about 100 million financially unserved or underserved population. Supporting and nurturing SMEs is crucial to Nigeria’s economy, as they contribute 50% of gross domestic product and provide 76% of jobs. With its presence in all 36 Nigerian states, Baxi fills a critical gap by providing informal SMEs and other unbanked Nigerians access to financial services.
The transaction is subject to approval of the Central Bank of Nigeria.
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