MNT-Halan, an Egyptian fintech unicorn, has recently secured $157.5 million in funding, which it plans to use in part to acquire another fintech company, Tam Finans, as it expands into the Turkish market. Tam Finans specializes in providing financing to micro-enterprises and SMEs and currently holds a 40% market share in Turkey. The combined entity resulting from this deal will have a loan book of nearly $1 billion.
The exact financial terms of the deal were not disclosed, but it was revealed that Actera, one of Turkey’s largest private equity firms, and the European Bank for Reconstruction and Development (EBRD) will both become shareholders in MNT-Halan. This latest funding round comes on the heels of a previous round in which MNT-Halan raised $400 million, valuing the company at $1 billion.
Mounir Nakhla, the CEO of MNT-Halan, expressed excitement about the opportunity to expand into Turkey, citing its proximity to Egypt, its large population, and its trillion-dollar GDP. With over 30% of Turkey’s population remaining unbanked, there is a significant opportunity for fintech companies like MNT-Halan to provide financial services to underserved segments of the population.
Tam Finans specializes in “invoice factoring,” a form of alternative financing that allows businesses to sell their outstanding invoices in exchange for upfront cash. The company has a loan portfolio of about $300 million and has developed a credit scoring system that enables it to digitally approve and disburse loans to over 20,000 active businesses. MNT-Halan, which primarily focuses on lending to small and micro-businesses, recently obtained a factoring license and plans to venture into that space in the future.
In addition to lending, MNT-Halan offers a range of other products, including consumer finance, prepaid cards, e-wallets, savings, payments, e-commerce, FMCG delivery, and mobile POS payments. The company recently launched a super app that brings all these services under one roof. Nakhla is particularly enthusiastic about the growth of the prepaid card product, which allows users to access consumer finance limits on the app and shop with flexible payment options.
MNT-Halan claims to have issued over 130,000 cards since its launch and is currently issuing between 1,000 and 2,500 cards daily. The company reported over $300 million in revenue in 2022 and is projecting the same growth for this year, despite the devaluation of the Egyptian pound. Nakhla expects the combined entities to reach between $500-600 million in revenues by 2024.
This latest funding round includes investments from existing investors such as DPI, Lorax Capital Partners, Apis Partners LLP, Lunate, and GB Corp. The International Finance Corporation (IFC), a subsidiary of the World Bank, has also invested $40 million in the company. With this round, MNT-Halan has raised over $630 million in equity and debt.
Overall, this acquisition and funding round highlight MNT-Halan’s ambitious expansion plans and its commitment to providing financial services to underserved populations in emerging markets. With its strong foothold in Egypt and its entry into Turkey and Pakistan, MNT-Halan is well-positioned to become a major player in the fintech industry in the region.
