Interswitch raises $110 million to bolster digital payments

According to a statement made by the two private investment firms on Wednesday, Interswitch has received $110 million in a combined investment from LeapFrog investments and Tiana Africa Capital.

The digital payment firm is Africa’s second unicorn, and its current funding will help it expand its digital payment services across the continent.

Interswitch, which was founded in 2002, revolutionized Nigeria’s cash-based economy by integrating electronic payments and switching services. When Interswitch first joined the Nigerian financial landscape, it was estimated that only about 200,000 Nigerians had internet connection, with many still getting used to their new phones. Interswitch became Nigeria’s first e-payment service to be connected to all banks, despite the fact that other e-payment providers had secured operating licenses 6 years before Interswitch.

Its consumer-facing products include Quickteller, an online consumer services platform for bill payments and airtime purchases, and Verve, a pan-African debit card scheme that is available in 185 countries thanks to a collaboration with Discover.

Interswitch’s most recent investment round occurred in 2019, when VISA bought a 20% share in the company for $200 million, making it Africa’s second unicorn. Even back then, its Verve and Quickteller products were being sold in 23 African countries, with physical locations in Gambia, Uganda, and Kenya. Interswitch is now one of Africa’s largest electronic payments and infrastructure companies, valued at $1 billion.

Interswitch is increasing its pan-African expansion plan, which involves recruiting new clients and expanding financial inclusion across the continent, amid discussions about the proliferation of fintech companies in Nigeria and Africa. Africa has 350 million unbanked people, according to recent data from the Global System for Mobile Communications (GSMA), and Africa accounts for 70% of the world’s $1 trillion mobile money market. The future of banking is no longer news; Interswitch, a pioneer in the African mobile money industry, does not want to be left behind.

“The desire to overcome difficulties and limitations that exist inside the traditional financial system has propelled the emergence of fintech in Nigeria and the larger Sub-Saharan region,” Interswitch Group CEO Mitchell Elegbe said in a statement. “The necessity to build solutions that match the unique needs of local customers and merchants led to the creation of Interswitch.”

Karima Ola, partner and head of Africa financial services at LeapFrog Investments, reaffirmed Interswitch’s plans to replicate its financial disruption in other African countries, saying the company “has been disrupting the cash economy, driving digital payments, and promoting equitable financial inclusion in Nigeria for two decades.” Interswitch’s tremendous skills and well-positioned position to exploit the significant opportunity in Africa’s changing digital payments ecosystem is confirmed by LeapFrog’s investment.”

Karima Ola, partner and head of Africa financial services at LeapFrog Investments, reaffirmed Interswitch’s plans to replicate its financial disruption in other African countries, saying the company “has been disrupting the cash economy, driving digital payments, and promoting equitable financial inclusion in Nigeria for two decades.” Interswitch’s tremendous skills and well-positioned position to exploit the significant opportunity in Africa’s changing digital payments ecosystem is confirmed by LeapFrog’s investment.”