In a rare and exciting acquisition of a US tech company by an Africa-based firm, digital payments network MFS Africa announced in June that it will acquire Oklahoma-based Global Technology Partners (GTP), a processor of prepaid cards which works with over 80 banks in 34 African countries.
MFS says the acquisition will expand its ability to offer payment cards that will connect to customer mobile money accounts, allowing African users to transact more easily with global merchants, such as large international e-commerce brands. The firm also says the deal will allow it to win deals with large American merchants and acquire talented US employees in merchant processing and other areas.
Transatlantic partnerships between Silicon Valley and Africa’s tech scene are nothing new. In 2020, Irish-American online payments giant Stripe bought Nigerian payments startup Paystack in a deal worth around $200m. But the traffic has mostly been one-way so far, as African fintechs flock to Silicon Valley to tap its enormous community of investors.
The continent’s startups attracted investments totalling about $5bn from around the globe last year, according to the African Private Equity and Venture Capital Association.
African firms on the hunt
But the MFS-GTP deal is a sign that Africa’s maturing startups, far from being merely targets to be swallowed by international rivals, are themselves in the market for acquisitions wherever they can find them.
MFS began working with GTP when the two firms worked together on projects with US cards giant Visa. Discussions around an MFS investment into GTP soon gave way to a full takeover. The firm already had experience of acquisitions in African markets. In 2021, MFS Africa acquired Baxi, a Nigerian SME-focused electronic payment network.
Its bid to scale up has caught the imagination of investors – shortly after the GTP deal, the firm announced that it had raised a further $100m in an equity and debt funding round led by Admaius Capital Partners, taking the total amount raised in the Series C to $200m.
The new funding will further accelerate its African expansion plans, as well as its expansion into Asia through a joint venture with LUN Partners to enable cross-border digital payments between Africa and China.
Sceptics may say that Oklahoma-based GTP is a rarity in that it is a US-based business with a principle focus on Africa. But as more money pours into Africa’s fintech space, expect to see African firms hunting ever further from home in search of exciting acquisitions.