Egyptian financial services provider MNT-Halan valued at $1 billion in $400 million funding • TechCrunch

Egyptian fintech and e-commerce ecosystem MNT-Halan has raised up to $400 million in equity and debt financing from local and global investors as it continues to serve underbanked and unbanked customers in the North African country.

The round includes $260 million in equity financing and $140 million through two securitized bond issues secured over the past year, investments that will now give MNT-Halan a post-money valuation of around $1 billion.

A large part of the equity, around $200 million, was provided by Abu Dhabi-based Chimera Investments. The investment company invested this amount in exchange for 20% of the Egyptian digital lender and e-commerce platform, which is also in the advanced stages of raising $60 million in additional capital in the coming weeks. Last week, IFC revealed it was investing $40 million in the company, but MNT-Halan declined to comment; it is expected that the remaining funding will come from existing shareholders.

In a statement, MNT-Halan said the investments “demonstrate continued confidence in the value proposition, management team and superior technology”. The company also plans to expand internationally following solid growth in Egypt and progress on the exchange agreement between the super app Halan and the Dutch microloan platform MNT Investments.

In 2021, Halan, which operated a digital wallet offering bill payment, e-commerce and driving as well as micro, nano and consumer loans, entered into a swap agreement with MNT Investments (a micro-lending platform operating in Egypt with roots dating back to 2010) for to offer financing solutions to sub-banks and non-banks. The leveraged buyout agreement, which allowed Halan shareholders to own shares in MNT, led to both companies adopting a new name: MNT-Halan. Headquartered in Egypt, its digital ecosystem connects consumers, merchants and micro-enterprises with corporate loans, consumer finance, payments, BNPL and e-commerce offerings, all powered by Neuron, its proprietary technology.

Last year, MNT-Halan raised $120 million from private equity firms including Apis Growth Fund II, Development Partners International (DPI) and Lorax Capital Partners, and venture capitalists such as Middle East Venture Partners, Endeavor Catalyst and DisruptTech. At the time, it had earned over 4 million and disbursed more than $1.7 billion in loans since its inception.

CEO Mounir Nakhla, who co-founded the company with Ahmed Mohsen in 2018, said MNT-Halan picked up where it left off and is currently Egypt’s largest lender to the unbanked: Total loans disbursed now exceed $2 billion per the company’s website (MNT-Halan issued loans north of $65 million last month). On average, businesses access loans worth $1,000 while paying 25% annual interest on the platform; Nakhla noted that the fintech maintains a healthy non-performing loan ratio without disclosing the figure.

The two securitizations, totaling USD 140 million, which MNT-Halan secured last year, are behind the impressive lending business. Fintech’s wholly-owned subsidiary, Tasaheel, was able to secure these funds locally via a securitization program with Commercial International Bank (CIB), Egypt’s largest private sector bank. It may further secure up to $250 million, the company said. In addition to CIB, participating regional and local financial institutions include Abu Dhabi Commercial Bank, Al Ahli Bank of Kuwait, Al Baraka Bank and National Bank of Egypt.

It has been shown that lending is MNT-Halan’s primary business and most important income generator; What is interesting about the company, however, is how it has layered a digital ecosystem of products including e-commerce, FMCG delivery and mobile POS payments that feed into its lending business.

To paint a picture: In June, the five-year-old company acquired Talabeyah, a B2B e-commerce platform that offers FMCG supplies directly to small merchants and retailers with next-day delivery. Nakhla tells me that this acquisition has enabled MNT-Halan to provide loans to these merchants or merchants, who then, in an agency banking game, act as mobile agents for individual customers who visit their stores. The company also wants to expand grocery shopping – in addition to other e-commerce stores that sell electronics and personal goods – to individual customers.

“We are leveraging our existing distribution through several million customers and adding services within our ecosystem,” said the CEO. “If you need a loan for your business, we will give you one; you need a loan for consumption, we will give you one; you need to order groceries or buy a mobile phone on our platform, we deliver it to you via our e-commerce stores. We can also give them the credit they can use to make all these purchases within the ecosystem.”

MNT-Halan lends to individual small business owners or individuals who need loans to manage their businesses. According to the Egyptian startup, its digital ecosystem serves more than 5 million customers in Egypt, of which 3.5 million are financial customers and over 2 million are borrowers. The startup plans to launch a debit card for its customers by the end of March.

Nakhla noted that because of the company’s focus on trading and lending, it has had to shut down its ride-hailing operations, one of Halan’s core offerings — before the merger — which largely lagged behind international mobility outfits like Uber, Careem and inDriver. Meanwhile, MNT-Halan faces competition from Khazna, Paymob and MaxAB across its other product offerings.

“In some sectors we have competition. But in the most important sector, we are the largest, and no one is as advanced in technology or creates a full-fledged ecosystem for sub-banks. I think this is where we differentiate ourselves from all other players in the market, the CEO said when asked about competing players in Egypt, while adding that the company is exploring a couple of mergers and acquisitions to consolidate its position in the country’s fintech. and e-commerce site.

For MNT-Halan to raise this sum in the current venture capital climate, it would have to increase revenue and open new streams, Nakhla noted in his statement. The fintech claims to have earned over $300 million in revenue last year, representing a modest 3.4x multiple on the unicorn valuation, which is in line with today’s public market valuations as previously reported by TechCrunch. On a related note, MNT-Halan is Egypt’s first private billion-dollar company, or the second if you count payments giant Fawry, which only achieved that valuation after going public (it’s well off the mark now, though).

“We are thrilled to be part of Egypt’s biggest fintech success story,” Seif Fikry, CEO of Chimera Abu Dhabi, said in a statement. MNT-Halan’s upward trajectory and momentum reflects the management team’s realization of its extraordinary vision to transform a high-touch business by seamlessly adding a unique proprietary technology platform while increasing product depth for its target customer segment.”