TA Associates, a global growth private equity firm, has acquired a minority equity interest in Interswitch, an Africa-focused integrated digital payments and commerce company. 

Financial terms of the transaction were not disclosed. 

Helios Investment Partners remains the majority shareholder of Interswitch. 

Babatunde Soyoye, Helios’s co-founder and Managing Partner, said: “For TA Associates to have made Interswitch their first investment in Africa we believe is a testament to Interswitch’s successful growth trajectory to date, and the quality and resilience of its brand and business model. We are confident that TA’s domain expertise and global reach will benefit Interswitch as we move forward together in partnership.”

Founded in 2002 in Nigeria, Interswitch is active across the entire payments value chain. 

The company owns and operates the country’s principal domestic debit card scheme, Verve, as well as serves as a third-party transaction processor for many of Nigeria’s largest banks. 

In addition, the company offers a number of B2B electronic payment services to public and private sector organizations and businesses, including government entities, hospitals, telecommunications companies and utilities, and also operates Quickteller, the leading B2C bill payments and digital commerce platform in Nigeria. 

Through add-on acquisitions, Interswitch also operates in Kenya and Uganda.

“By strategically partnering and aligning its interests with key banks, merchants and other institutions, Interswitch has become a leading provider for payments solutions in an emerging and rapidly growing market in Nigeria,” said Naveen Wadhera, Managing Director at TA Associates. 

“Interswitch is a unique, high quality and strategic asset located in one of Africa’s leading economies. We are delighted to expand upon our longstanding presence within the global payments industry through our partnership with the management team and Helios, and look forward to helping Interswitch continue to expand its business,” he said.

The digital payments evolution is in the early stages of development in Nigeria, with cash used for 99% of transactions according to McKinsey & Company, versus approximately 50% for developed markets in North America and Europe. 

Despite the young market, the size of the Nigerian payments opportunity is underpinned by its continent-leading population and sizeable economy. 

Based on estimates from McKinsey & Company, Interswitch occupies a leading position in the emerging marketplace, especially in debit cards, which comprise 99% of all cards in Nigeria.

Mitchell Elegbe, Founder and Managing Director at Interswitch, said: “Since our founding, we have been committed to creating social, environmental and economic value by facilitating trade through forms of exchange that are secure, convenient and consistent.”

“Keeping that in mind, we believe a partnership with a growth private equity firm such as TA Associates will prove highly beneficial to our ongoing efforts of consolidating the impact of our services and increasing financial inclusion for all. We welcome TA as our newest investor and look forward to benefitting from their experience in the payments space and their valuable insight and support,” he said.

Latham & Watkins served as legal counsel to TA Associates, whereas Debevoise & Plimpton served as legal counsel to Helios Investment Partners.

TA Associates is one of the largest and most experienced global growth private equity firms.

The firm has invested in more than 480 companies around the world and has raised $24bn in capital.