Kenya's Cellulant valued at Sh10.8bn in American fund’s stake purchase

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By Annie Njanja

Published January 7, 2019

 

Kenyan-founded digital payments services provider Cellulant is valued at Sh10.8 billion, regulatory filings related to an ongoing share sale to a US firm have revealed.

The Competition Authority of Kenya (CAK) in a notice last week revealed that Cellulant had sold a 44.4 percent stake to the US-based social impact investment firm, The Rise Fund.

The deal, which was concluded in May last year, was at the time valued at Sh4.8 billion. That puts Cellulant’s valuation at the time at Sh10.8 billion, making it one of Kenya’s largest medium-sized enterprises.

Cellulant is also bigger than many Nairobi Securities Exchange-listed firms.

The deal between Cellulant and The Rise Fund was billed as one of the largest by a Kenyan fintech company in recent times.

The Rise Fund is a subsidiary of TPG Growth -- a US company that specialises in growth equity and middle-market buyouts.

The CAK, through a legal notice, said it had given the partners the green light to proceed with the deal since it had met the threshold for exclusion under the Mergers Threshold Guidelines.

According to the Competition Act, mergers whose parties have a combined turnover threshold of below Sh1 billion can be considered for exclusion.

Affect competition

“…Competition Authority of Kenya excludes the proposed acquisition of 44.04 per cent of Cellulant Corporation by The Rise Fund Certify, L.P, from the provisions of Part IV of the Act due to the following reasons,” said CAK’s director-general, Wang’ombe Kariuki.

“The acquisition will not affect competition negatively, the [parties'] combined turnover of Sh844.5 million meets the threshold for exclusion under the Merger Threshold Guidelines.”

The Rise Fund made the investment in Cellulant together with Endeavor Catalyst, a co-investment fund that specialises in growth equity investments, and Satya Capital, an independent venture firm with a focus on African business.

The new investors are the latest in a chain of international private equity firms that have been pouring millions of shillings into Cellulant in recent years.

Cellulant’s list of shareholders includes Velocity Capital Private Equity, Progression Capital Africa Limited and TBL Mirror Fund.

Cellulant said in an earlier correspondence with the Business Daily, that it planned to use the funds to enter two new markets in Africa as well as upgrade its payment infrastructure to suit emerging demands of the market.

The fintech also had plans to expand its operations in Nigeria where it is targeting 17 million farmers who have e-wallets on its Agrikore platform -- a blockchain-based smart-contracting and marketplace system.

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Source: Business Daily Africa