Visa buys South Africa’s Fundamo for $110m
Global payments giant Visa is buying Cape Town-based Fundamo, a mobile payments company focused on emerging markets, for $110m in cash. Fundamo is privately held by a group of South African investors, including Sanlam, Remgro and HBD Venture Capital, founded by billionaire Mark Shuttleworth, the man behind the popular Ubuntu Linux operating system.
Visa says the deal will help “accelerate the execution” of its global strategy, announced last month, to provide the “next generation of payments solutions, allowing consumers to transact wherever and whenever they choose, using a card, computer or mobile device”.
Fundamo has more than 50 active mobile financial services deployments in about 40 countries, including 27 countries in Africa, Asia and the Middle East. Fundamo CEO Hannes van Rensburg and his management team will continue to run the company after conclusion of the deal. Prior to the formation of Fundamo, Van Rensburg was Chief Information Officer at Sanlam. He is also one of the founders of the Cape IT Initiative.
In announcing the deal, Visa says that although “mobile financial services in developing markets are growing and have become a core service offered by many mobile operators and financial institutions, these services are often limited in scalability and reach and not interoperable with other regional payment services on global payments networks”.
“Fundamo’s platform enables the delivery of mobile financial services to unbanked and under-banked consumers around the world — including person-to-person payment, airtime top-up, bill payment and branchless banking services,” it says. “The combined Visa-Fundamo platform will add enhanced functionality and new services to existing mobile financial services subscribers across Africa, Asia and Latin America.”
Visa says the deal will “expand the utility of closed-loop systems, enable them to be interoperable, make financial services available to more consumers and offer merchants access to new customers”.
“This has the potential to connect billions of unbanked and under-banked consumers to each other and to the global economy.”