In what could be another turning point for the African e-payments space, a digital commerce firm has indicated interest in one of the leading payments service providers in Africa. The investee, DPO Group itself, has been acquiring smaller fintechs in the space over the years.
Pushing African Payments
Network International, a group of companies and an enabler of digital commerce across the Middle East and Africa (MEA) region, is to acquire DPO Group—a Nairobi-headquartered fintech company.
As part of the deal, DPO Group, which has presence across Africa to penetrate its fast-growing payments market, will handover hundred percent of its controls to Network International. Nevertheless, the payments firm will continue operating under the same brand.
Network International has its headquarters in Dubai and is listed on the London Stock Exchange (LSE). The £2.2 Bn firm is pan-regional and has presence across payments value chains, delivering integrated omnichannel payments services to its customers.
The acquisition of DPO Group, for which it is to conduct a share placing to fund, will supports its capabilities across Africa’s online, mobile and alternative payments sub-sectors.
Network International also looks to providing merchant and MNO relationships and increasing the cross-selling opportunities to both customers from both sides of the agreement.
Udayan Goyal, Managing Partner and Apis (an investor in DPO) Co-Founder said: “Africa represents one of the fastest growing and most under-penetrated markets for online payments in the world. Our investment in DPO Group was recognition of this fact and the company’s subsequent rapid growth and ultimate acquisition by Network International speaks to the enormous opportunity within payments across Africa.
He added: “We believe the combination of DPO Group with Network International will create tremendous value for both businesses as they continue to deliver world-class solutions across African markets.”
The payments landscape of Africa is garnering a lot of attention, and acquisitions are proof of that. Just last month, pan-African cross-border payments gateway, MFS Africa, acquired Beyonic in an undisclosed deal.
Acquisition After Acquisition
When it comes to DPO Group, acquisition has become somewhat a synonymity. Also known as Direct Pay Online Group, the firm acquired South African payments processing service provider, PayFast, in multimillion rand deal in July 2019. Interestingly, that was not DPO’s first move to take over another company.
It invested USD 7 Mn in another South African fintech player, a payment facilitator called PayGate. DPO took over the company in September 2019, which was after it landed about USD 7 Mn from Apis Partners in a private equity round.
In 2016, an undisclosed deal saw it take over the Botswana and Namibia operations of Virtual Card Service (VCS), another South Africa-based payments firm, one which had been operating since 1998.
In logical terms, Network International is taking over a fintech that has taken over many other fintechs. Having become a loud voice in the payments ecosystem of Africa, it makes sense to see how DPO’s potential caught the attention of another leader in the space.
Eran Feinstein, CEO of DPO Group said: “This deal represents a significant milestone for the pan-African payments landscape and the customers and businesses we serve. Combining the two companies will allow us to broaden our offering for new and existing customers, significantly improving capacity for Africa’s merchants to do business not only across the continent but in the Middle East as well as globally.”
Featured Image: Mubasher