Growth investor TA Associates has bought a minority stake in Interswitch, an African digital payments business majority owned by Helios Investment Partners, the firm said in a statement on Monday.
Helios, which will remain the majority shareholder in the business, acquired a 68 percent stake in InterSwitch for $110 million in 2011. Financial terms of the transaction were not disclosed.
Interswitch owns and operates Verve, Nigeria’s principal domestic debit card scheme, as well as serving as a third-party transaction processor for many of the country’s largest banks, TA said in a statement. Through bolt-on acquisitions, Interswitch has added operations in Kenya and Uganda.
TA is invested in six payment businesses around the world including BluePay in the US, Yeepay in China and W.A.G Payment Solutions in the Czech Republic. “We are delighted to expand upon our longstanding presence within the global payments industry through our partnership with the [Interswitch] management team and Helios,” said Naveen Wadhera, who co-heads TA’s Asian operations and the firm’s European technology group.
Helios is investing its $1.1 billion third fund, which closed in early 2015.
The payments industry has been a fertile hunting ground for private equity investors. Bain Capital and Advent International, for example, have clubbed together on four occasions to invest in the sector, as reported in the March edition of Private Equity International.
Digital payment is in the early stages of its development in Nigeria, with cash used for 99 percent of transactions, compared to approximately 50 percent for developed markets in North America and Europe, said TA Associates, citing data from consultancy McKinsey & Company.