LUN Partners Group, a Chinese venture capital firm that primarily invests in overseas firms, has led a $4.5-million Series B funding round in pan-African fintech firm MFS Africa.
The funding round makes MFS Africa, operator of the largest digital payments network in Africa, the first African fintech company to receive funding from a China-based VC, according to a statement released on Wednesday. Amsterdam-based investment firm Goodwell Investments and several angel investors joined the Series B funding round in MFS Africa, which claims to connect over 170 million mobile wallets through more than 100 partners across 55 markets.
The fintech firm said the investment will fuel the expansion of its network in Africa and beyond, and help unlock new capabilities including a merchant services offering, which will allow major retailers and internet companies to accept payments from consumers via their mobile wallets. “The company allows merchants, banks, mobile operators and money transfer companies to take advantage of the ubiquity of mobile wallets as safe, convenient, and cost-effective transaction channel,” MFS Africa said in the statement.
The latest investment calls for MFS Africa to work closely with LUN Partners, its portfolio companies, and investor base to boost financial inclusion in countries targeted by China’s ‘Belt and Road’ initiative.
In return, LUN Partners will work with MFS Africa to help Chinese and other Asian enterprises, especially fintech and e-commerce firms, drive financial inclusion and trade more easily in Africa. The Chinese investor aims to do this by providing a single access point to scale and monetise digital services across the continent using mobile money networks. “China is home to some of the most exciting and fastest growing technology firms in the world, and Africa is the birthplace of mobile money.
At the same time, the continent remains fragmented with no single network able to serve the region,” said Peilung Li, Founder and Chairman of LUN Partners Group. MFS Africa, he said, can substantially boost cross-border trade and open up new opportunities for Chinese and global firms.
The company’s founder and CEO, Dare Okoudjou, said the funding round, and strategic nature of the investors, is a testament to MFS Africa’s performance and unique potential. A McKinsey report released last year showed that Africa is the global leader in mobile money, which has become an important component of the region’s financial services landscape. While mobile network operators have dominated mobile money services in Africa for the past decade, fintech firms have established a solid footing in the market recently, the report added. Africa’s two leading mobile money providers earned $550 million and $220 million in annual mobile financial services revenues in 2017, according to McKinsey.