Africa rising: Mastercard buys minority stake in MTN’s FinTech biz 💸; Monzo plots to move into retirement savings with Monzo Pensions 👀; Marqeta embeds Gen AI into Embedded Finance 😎

FinTech is Eating the World, 15 August

Hey Everyone,

Happy Tuesday! Today we’re looking at the rising Africa as Mastercard buys a minority stake in MTN’s FinTech biz (what it means + some solid deep dives), Monzo that plans to move into retirement savings (why it makes sense + deeper dives into Monzo), and Marqeta that just embedded Gen AI into Embedded Finance (it’s a good move + what we should expect next). Let’s jump straight into the interesting stuff 🌶

Africa rising: Mastercard buys minority stake in MTN’s FinTech biz 💸

The news 🗞️ Payments giant Mastercard MA 0.00%↑ has agreed to buy a minority stake in the FinTech division of MTN Group, Africa’s largest cell phone provider, which it values at a whopping $5.2 billion.

This is rather big news, so let’s take a look.

More on this 👉 The move comes a year after MTN Group separated its African fintech subsidiary from its main telecom business to enhance growth in the thriving FinTech sector. The company secured a mobile banking license in Nigeria, its largest market, which enabled it to offer financial services to a large number of new customers.

In the first half of the current year, MTN's mobile money business recorded transactions worth $8.3 billion, a 37% increase, with over 60 million active users. Solid!

Also, MTN Group had more than 290 million subscribers by the end of June 2023.

We must note that this investment by Mastercard follows a similar deal made in 2021 with Airtel Africa, a competitor of MTN. Mastercard acquired a stake in Airtel Africa's mobile money business for $100M at a valuation of $2.65B.

ICYMI: The Finance Giants: Visa vs. Mastercard 💳 [a quick breakdown + latest numbers + solid deep dives]

✈️ THE TAKEAWAY

What this means? 🤔 Let’s look at the macro view first. Telcos across Africa, including Safaricom and Vodacom, are focusing on separating their FinTech divisions from their traditional telecom ops so they could tap into the growing digital services market. The transition to digital services in Africa is thus driving the expansion of financial services offered by these telcos, leading to competition with established FinTehcs in the region like Flutterwave, Chipper Cash, etc. When it comes to Mastercard, their decision to buy a stake in MTM is primarily based on three things. First, it’s a good investment as it’s based on a 16x multiple on a total enterprise valuation of ~$5.2B. This suggests that Mastercard sees MTM as a valuable investment opportunity. Second, it further strengthens the card network giant’s expansion into Africa. MTN is Africa's biggest wireless carrier, and Mastercard's investment in its financial technology business is a strategic move to expand its presence in Africa's massively growing FinTech market. Last, but not least, it’s about the mobile money growth potential as MTN mobile money has been growing rapidly, with over 100M registered users across 16 African countries. Looking at the big picture, it’s perfect proof of the massive potential that Africa holds. First, it was Visa V 0.00%↑ and now we have Mastercard joining the race. Africa is rising.

ICYMI: Visa knows that Africa is the world's next superpower. You should pay attention too💡 [+ more bonus reads]