Moniepoint could lengthen its presence past Nigeria after getting approval to acquire Kenya’s funds and credit startup, Kopo Kopo. The transaction worth has not been disclosed.
Just a few months in the past, rumours circulated about Nigeria’s fintech firm Moniepoint Inc contemplating the acquisition of an East African funds agency. At the time, it was unclear which fintech was the topic of the proposed acquisition. However, immediately, the Competition Authority of Kenya (CAK) has supplied readability by saying that Moniepoint Inc can now acquire Kopo Kopo. The CAK oversees competition-related issues for transactions exceeding KES 1 billion ($7 million by the present alternate fee), which implies that the acquisition was the identical or exceeded this quantity.
In an e mail to TechCabal, Moniepoint Inc mentioned, “We have been vocal about our interest in Kenya as part of our mission to provide financial happiness for people across Africa. This regulatory approval is a milestone in that process and one that we are delighted about.”
CAK mentioned in a press release, “The Competition Authority of Kenya has approved the proposed acquisition of 100% shares in Kopo Kopo Inc. by Moniepoint Inc. unconditionally. This approval has been granted based on the two key considerations during the merger analysis that; first, the transaction is unlikely to negatively impact competition in the market for digital credit; and second, the transaction will not elicit negative public interest concerns.”
Moniepoint Inc, based by two ex-Interswitch workers, is registered in the U.S. and based totally in Nigeria. It additionally has a presence in the U.Okay. It has no base in Kenya and didn’t report turnovers or belongings on this area prior to the transaction. Kopo Kopo is registered in the U.S. however operates in Kenya, providing digital monetary companies to native companies, primarily short-term enterprise loans.
The proposed transaction will see Moniepoint Inc acquire all shares of Kopo Kopo, constituting a merger beneath Kenya’s Competition Act 2010. This regulation covers mergers the place one enterprise positive factors management over one other in Kenya, achieved by way of share transactions or integration.
Transactions that surpass a mixed turnover or belongings of KES 1 billion ($7 million) require CAK’s approval. This implies that Moniepoint’s versus Kopo Kopo transaction surpassed that quantity. Although the precise worth of the acquisition has not been revealed, Kopo Kopo, which final raised $2.1 million in Series B funding in 2015, was valued in the low 10s of thousands and thousands at the time of the transaction. The firm has been worthwhile since then, in accordance to individuals with information of the matter.
“Merging parties whose combined turnover or assets, whichever is higher, is over Ksh. 1 billion are required to seek approval from the Authority before implementing the proposed transaction. The transaction between Kopo Kopo Inc. and Moniepoint Inc met this threshold for mandatory notification to the Authority and full analysis as provided in the Competition (General) Rules, 2019,” CAK clarified.
Moniepoint Inc provides cost channels for companies, credit, enterprise administration instruments and banking options resembling financial savings and investments. Kopo Kopo supplies the identical instruments to companies in Kenya however doesn’t have a banking product. At its peak, hundreds of small and medium-sized companies in Kenya had adopted Kopo Kopo’s funds platform. A partnership with Safaricom efficiently inspired companies to embrace digital funds, together with Lipa na M-PESA companies.
However, primarily based on CAK’s evaluation, Kopo Kopo has a aggressive edge in offering credit to its shoppers. The digital lending market is dominated by merchandise linked to M-PESA, with M-Shwari (providing credit and financial savings), Fuliza (offering overdrafts), and KCB M-PESA (providing loans and financial savings) main the area with shares of 34%, 25%, and 15%, respectively. Tala and Branch have secured the fourth and fifth positions with shares of 13% and 9%, respectively. Kopo Kopo’s mortgage product is a part of the 32 different digital lenders registered by the Central Bank of Kenya (CBK), constituting 4% of the on-line lending market share.
Moniepoint Inc will probably let Kopo Kopo run its credit product alongside different companies, though that would change. The firm informed this publication that there are plans to introduce Moniepoint merchandise into the Kenyan market. “At the end of the process, we expect to extend some of our services into the market, in line with its needs. We will be working with the Kopo Kopo team, and building on the brilliant work they’ve done over the years,”
“The market structure therefore, will not change post-merger since the acquirer is not involved in the same business activity in Kenya, as the target,” CAK concluded.
…. to be continued
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