Egyptian fintech startup, MNT-Halan has raised over $200 million from private investment firm, Chimera Abu Dhabi, in addition to $140 million through two securitized bond issuances, becoming the latest unicorn from the Middle East and North Africa (MENA).
Chimera Abu Dhabi currently owns 20% of the company, according to a statement released in February. The deal was first announced in October 2022 when GB Auto, a major shareholder of MNT-Halan, announced that its affiliate signed the definitive agreements for the sale of 21.7% to Chimera.
MNT-Halan also said it is in the advanced stages with international investors to raise $60 million of primary capital. The $60 million primary capital is expected to be secured in April and will be led by the International Finance Corporation (IFC) which is set to invest up to $40 million in equity. According to the IFC, the investment will promote increased access to finance for micro, small, and medium enterprises (MSMEs) and consumers in Egypt.
“Following the completion of these investments, MNT-Halan’s valuation will exceed $1 billion,” the company said.
Meanwhile, the $140 million raised was via two securitized bond issuances through subsidiaries Tasaheel Microfinance Company (Tasaheel) and Halan Consumer Finance (Halan).
“The proceeds of the fund will be directed for the growth of the loan book and the international expansion planned in 2023,” Vice President of investments at MNT-Halan, Andre Valavanis, tells Business Monthly.
Achieving unicorn status is the ultimate swing for any startup. It is achieved when the privately-owned company becomes valued at $1 billion. It requires innovation and a successful game plan as a unicorn startup acquires the valuation while being unlisted on the stock market.
Founded in 2018 by Mounir Nakhla and Ahmed Mohsen, MNT-Halan’s services include small and micro business lending, payments, consumer finance, and e-commerce. It serves as an e-commerce platform for digital banking and an alternative to cash payments.
The company has generated revenues of $203 million for the first nine months of 2022, with a 39.5% growth compared to 2021, according to the statement.
Digital banking in Egypt
Over the past few years, Egypt has been witnessing a rise of fintech startups in the digital banking arenas, the likes of Fawry and Telda. Both these platforms offer cash-free services in an effort to revolutionize banking within the North-African country.
Fawry, which is considered one of Egypt’s largest digital payment platforms, has been making strides in the industry. After striking a partnership to facilitate online growth for Egyptian startups with leading American e-platform for entrepreneurs, GoDaddy, in early 2022, Fawry hit the $1 billion mark in August 2020. This came after its Egypt stock exchange (EGX) listing in August 2019. The following February 2021, the company’s value went up to $2 billion.
Hailed as Africa’s fourth largest ecosystem, Egypt’s startups were found to be adept at working within the fintech industry, according to an analysis published in the Oxford Business Group.
The North-African country’s tech startup ecosystem began a fast ascension in 2015, peaking in 2018 and 2019, and going through a lull during the pandemic, according to a report released by The Ministry of Communications and Information Technology (MCIT), in 2021. As per its findings, about 35% of startups went through an accelerator, with up to 93% of those in the tech industry being based in Cairo. Since 2015, the number of startups sprouting in Egypt has far more than quadrupled with 114 registered tech startups in 2020.
Startup culture has been resonating across the continent with a surge in investments and the accelerated creation of unicorn companies as of 2021. That same year, the North-African country saw a new record with a 176 % growth from the previous year in venture capitalist (VC) investments, according to a report by Magnitt published in January 2022. A 65 % increase in the number of investors in startups within the country was also recorded, with funding that year reaching just under $500 thousand. A stream of success stories in terms of investments has also come out of Egypt with companies like Swvl and Vezeeta, as per the MCIT report. By September 2021, Egypt had over 562 startups registered and made up about 19.8 % of tech startups recorded within the continent.