Interswitch is poised to restart investment in African startups again, according to CEO and Founder, Mitchell Elegbe, in his session on Techcrunch’s Disrupt 2020.
The Africa-focused fintech company launched a $10 million venture arm in 2015 but slowed to a stop after acquiring fintech security company, Vanso, in 2016.
The relaunched investing will be selective and will see Interswitch investing only in startups that the company can add value to financially and through its network. Already, a certified team has been put in place to kickstart the venture arm of the business.
“We’ll be very selective in the companies we invest in. They should be companies that Interswitch clearly as an entity can add value to. They should be companies that help accelerate growth by the virtue of what we do and the customers that we have,” he said.
Interswitch launched in 2002 in Lagos and has since expanded to 23 African countries.
Interswitch will continue with alliances but don’t expect an IPO, yet
Alliances have been a major part of the company’s growth. According to Mitchell, “Visa, Discover, and American Express are some of the strategic partners that we have come across. We have gone after them becuase we believe they will assist us in furthering our vision of replicating what we have done in Nigeria in other African markets.”
The partnership with American Express earlier this year brought Interswitch’s merchants into the global American Express network and made its cards more relevant to its users by leveraging Interswitch’s platforms in Nigeria.
A $200 million equity investment by Visa in 2019 brought Interswitch’s valuation to $1 billion, making it a unicorn company.
Elegbe said the company is focused on building products for the African continent and expanding into more countries.
An IPO may happen later and is one of the options the company will consider when private equity investors want an exit out of the business, however, there is no definite answer as to whether it is in the immediate plans of the company.
“We have private equity investors and at some point in the life of the business they want exits.” he said. “When it is time for them to exit there are various options on the table and an IPO is an option.”
The IPO has been delayed by a myriad of reasons. The drop in crude oil pricing and currency volatility in the country prevented the company from listing in 2017. The plans were revived in 2019 when Interswitch enlisted JPMorgan Chase & Co and Standard Bank Group to work on the potential initial public offering.
The IPO which was slated for early 2020, according to a Techcrunch source, has not occurred, perhaps due to the COVID-19 pandemic. In place of an IPO, the company announced the listing of N23 million bond on the Nigerian Stock Exchange (NSE) in February.