Nigerian fintech company, One Finance (OneFi) has announced the acquisition of AmplifyPay, a payments company.
AmplifyPay is a platform which specializes in handling recurrent and subscription based payments in Nigeria.
Founded by Segun Adeyemi, the startup seeks to automate recurring type transactions that currently happen via cash, bank transfers, standing orders and postdated cheques. This takes away the need to always remember to pay your bills and prevents being cut off from services you really need. According to the company, this market is valued at over $32 billion.
@OneFiCo makes first fintech acquisition in Nigeria with @amplifypay buy @paylaterNG's parent company has become the first Nigerian fintech to acquire another #fintech startup. It is the first of many expansion plans the company https://t.co/PwzB9QOSpb
— Father of Two Boys (@FrankEleanya) March 21, 2019
The acquisition of AmplifyPay gives OneFi a huge boost. Importantly, it gives OneFi control over AmplifyPay’s core products: AmplifyPay payment processing and mTransfer. mTransfer is a keyboard feature that allows users make payments even while chatting. AmplifyPay services are currently being used by over 1000 merchants alongside four national banks.
As part of the deal, AmplifyPay CTO and co-founder, Maxwell Obi, joins the OneFi team. He will lead the integration and development of the company’s payments operations.
According to several reports, the deal which became official by March 1, 2019 is the first merger and acquisition deal involving two or more Nigerian fintechs. However, the value of the acquisition has not been disclosed.
OneFi has completed an acquisition of @amplifypay who, through their mTransfers solution (https://t.co/bL4CW7hRoz), pioneered social payments in Nigeria.
— One Finance (@OneFiCo) March 21, 2019
We’re excited to have the team on board to help scale this innovative technology across various markets. #fintech https://t.co/WzzCvhuT4x
“Today’s announcement signals OneFi’s first acquisition. This is a strategic decision that kicks off our transformation from a digital lender to a diverse digital financial services platform focused on transactions, payments and loans. This will ensure we meet our ambitious goal of doubling our size in Nigeria this year,” says Chijioke Dozie, CEO of OneFI.
According to AmplifyPay co-founder, Maxwell Obi, the OneFi acquisition represented an “extension of our vision.”
“We stepped into this industry to use our payment solutions to facilitate a growing economy, and OneFi’s focus on financial inclusion feeds well into this,” he explains. “It’s a real example of a collaborative effort, and I’m excited to see the next chapter of our development.”
“We’re not a bank but we’re offering more banking services…Customers are now coming to us not just for loans but for cheaper funds transfer, more convenient bill payment, and to know their credit scores,” – @OneFiCo CEO C. Dozie on acquisition of @amplifypay | via @TechCrunch pic.twitter.com/SA7Z4QqPVc
— Jim Perry (@mi_jim) March 21, 2019
The timing of the acquisition could not have been better as OneFi is on the verge of a crucial transformation. The fintech aims to rebrand and re-emerge as a full-fledge digital bank as early as April 2019. It has already announced a rebranding and a name change. Buying AmplifyPay only echoes this even more.
Exit Boost For Venture Investing
Yet the deal is also important for another reason. Venture funding focuses on investing in startups with the intention of getting a profitable exit. An exit comes usually in the way of an acquisition or an IPO.
Thrilled to announce MEST #fintech company @amplifypay has been acquired by @OneFiCo! Congratulations to founders @segunhq and @obi_maxwell! #Africantech #Nigeriatech #startups #acquisition https://t.co/MCQz8JPja1
— MEST Africa (@MESTAfrica) March 21, 2019
But in Africa and Nigeria particularly, neither happens frequently or has ever happened. However this has not stopped VC funding from flooding in over the last few years. Many VCs hope exits will be more common eventually.
Thus, the acquisition is also a win for AmplifyPay investors, MEST Africa.
“Seeing Amplify exit to such an established and well-known player in Nigeria’s fin-tech sector is a really significant moment in MEST Africa’s 11-year history,” says Aaron Fu, Managing Director of MEST Africa.
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