Egypt-based financial technology company MNT-Halan has raised $340 million in debt and equity in its latest financing round ― one of the largest in the Middle East over the past 12 months.
Abu Dhabi’s Chimera was the largest investor in the latest financing round, ploughing in $200 million in equity investment in exchange for a stake of more than 20 per cent in the Cairo-based company, MTN-Halan said in a statement on its website.
MNT-Halan started as a ride-hailing company in Egypt, but has turned into a FinTech ecosystem offering business lending, payments, consumer finance and e-commerce services.
It has micro, consumer and nano-finance licences, as well as an electronic wallet licence from the central bank.
With 1.3 million monthly active users, the company serves more than five million customers in Egypt, including two million borrowers.
“We are thrilled to be part of Egypt’s greatest FinTech success story. MNT-Halan’s upward trajectory and momentum reflect the management team’s realisation of its ... vision to transform a high-touch business by ... infusing an unparalleled proprietary tech platform while increasing product depth for its target customer segment,” said Seif Fikry, chief executive of Chimera.
The latest equity deal follows a $120 million investment in the third-quarter of 2021 by global and regional growth investors, including Development Partners International, Apis Growth Fund II and Lorax Capital Partners.
MNT-Halan is in advanced talks with international investors to raise another $60 million in primary capital.
Following the completion of these investments, its valuation will exceed $1 billion, the company said.
“These investments demonstrate continued confidence in MNT-Halan’s value proposition, management team and superior technology, and will also enable international growth,” it said.
Winning the backing from Chimera’s is “significant” in terms of the execution of the company’s strategy, said Mounir Nakhla MNT-Halan's founder and chief executive.
“The timing of the transaction is also a testament to our ability to significantly increase our revenues and open new revenue streams while growing our bottom line, despite the macroeconomic situation,” Mr Nakhla said.
“We continue to grow both organically and inorganically by offering cutting edge financial products and services locally and internationally to empower the underserved.”
The company is riding the ongoing venture capital investment wave in the Mena region as funding for growth companies, especially those in the FinTech sector, continues to increase.
Fears of a looming recession and spiralling inflation that drove the equities market rout globally have affected asset valuations in private markets, opening up new investment opportunities for venture capital investors, according to alternative assets industry analytics specialist Preqin.
Entry valuations have reduced significantly and competition for deals has softened amid the global economic headwinds, it said in a December report.
Start-ups across the Middle East, Africa, Pakistan and Turkey raised $7.2 billion through 1,473 deals last year, despite macroeconomic and geopolitical uncertainty, according to a report by data platform Magnitt.
FinTech led both funding and number of deals in the region, Magnitt data found. The sector's funding reached $2.25 billion across 351 deals in 2022.
Meanwhile, funding for Mena start-ups crossed the $3 billion-mark last year, an annual increase of 8.3 per cent, the researchers found.
MNT-Halan on Wednesday also announced two deals worth $140 million through securitised bonds for two of its subsidiaries.
Tasaheel Microfinance Company securitised $100 million of its loan book in the second issuance of its securitisation programme. Halan Consumer Finance securitised $40 million of its loan book in its first securitisation transaction since its start of operations in 2021.
The issuances were oversubscribed and the offerings reflect the “high quality, diversity and granularity of the combined securitised loan books, consisting of 246,000 contracts and a robust cash pay-back ability”, MNT-Halan said.