Egyptian financial services provider MNT-Halan valued at $1B in $400M funding | TechCrunch (2024)

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 issuances secured within the past year, investments that will now see MNT-Halan command a post-money valuation of about $1 billion.

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

In a statement, MNT-Halan says the investments “demonstrate continued confidence in its value proposition, management team, and superior technology.” The company also plans to expand internationally after solid growth in Egypt and progress on the swap agreement between super app Halan and Netherlands-based microlending platform MNT Investments.

In 2021, Halan, operating a digital wallet that offered bill payments, e-commerce and ride-hailing as well as micro, nano and consumer loans, entered into a swap agreement with MNT Investments (a microlending platform operating in Egypt with roots dating back to 2010) to provide financing solutions to the underbanked and unbanked. The leveraged buyout deal, which was formed in 2018, saw both companies adopt a new name: MNT-Halan. Headquartered in Egypt, its digital ecosystem connects consumers, merchants and micro-enterprises with business loans, consumer finance, payments, BNPL and e-commerce offerings, all backed 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 served over 4 million and disbursed more than $1.7 billion worth of loans since inception.

CEO Mounir Nakhla, who founded the company with Ahmed Mohsen, said MNT-Halan continued where it left off and is presently 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 $1,000 worth of loans while paying a 25% annual interest on the platform; Nakhla noted the fintech maintains a healthy nonperforming loan ratio without disclosing its figure.

The two securitizations, totaling $140 million, that MNT-Halan secured last year are behind its impressive lending operations. The fintech’s wholly owned subsidiary, Tasaheel, managed to secure these funds locally via a securitization program with the Commercial International Bank (CIB), Egypt’s largest private sector bank. It can further securitize 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.

Egyptian fintech MNT-Halan lands $120M from Apis Partners, DisrupTech and others

It’s been demonstrated that lending is MNT-Halan’s primary business and main revenue generator; however, what’s interesting about the company is how it has layered a digital ecosystem of products, including e-commerce, FMCG delivery and mobile POS payments that feed its lending operations.

To paint a picture: Last 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 allowed MNT-Halan to provide loans to these merchants or grocers, who then, in an agency banking play, act as mobile agents to individual customers who frequent their shops. The company also wants to extend grocery shopping — in addition to other e-commerce stores selling electronics and personal items — to individual customers.

“We’re capitalizing on our existing distribution through million-plus customers and adding services within our ecosystem,” said the chief executive. “If you need a loan for your business, we’re going to give you one; you need a loan for consumption, we’re going to give you one; you need to order groceries or buy a mobile phone on our platform, we’ll deliver it to you via our e-commerce stores. Also, we can give them the credit they can use to make all of these purchases within the ecosystem.”

MNT-Halan lends to single small business owners or individuals who need lending 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 clients 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 due to the company’s focus on commerce and lending, it’s had to shut down its ride-hailing operations, one of Halan’s core offerings — before the merger — which mostly lagged international mobility outfits like Uber, Careem and inDriver. Meanwhile, MNT-Halan faces competition from Khazna, Paymob and MaxAB across its other product offerings in Egypt.

“In some sectors, we do have competition. But in the most important sector, we’re the largest, and no one is as advanced in technology or creates a fully-fledged ecosystem for the underbanked. I think this is where we differentiate ourselves from any other player in the market,” said the chief executive 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 space.

For MNT-Halan to raise this sum in the current venture capital climate, it had to increase its revenues and open new streams, Nakhla noted in his statement. The fintech claims to have made over $300 million in revenue last year, representing a modest 3.4x multiples on its unicorn valuation which aligns with the present public market calculations as previously reported by TechCrunch. On a related note, MNT-Halan is Egypt’s only private billion-dollar company; payments giant Fawry achieved that valuation after going public in 2019 although it’s well off the mark now.

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

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As an expert in fintech and e-commerce ecosystems, I can provide a detailed analysis of the information presented in the article about MNT-Halan, the Egyptian fintech and e-commerce platform. My expertise is grounded in a thorough understanding of financial technology, investment structures, and the dynamics of the underbanked and unbanked markets. I will draw on my knowledge to elucidate various concepts and provide insights into the key elements discussed in the article.

  1. Equity and Debt Financing:

    • MNT-Halan has successfully raised up to $400 million in equity and debt financing from local and global investors.
    • The funding includes $260 million in equity financing and $140 million through two securitized bond issuances within the past year.
    • The investments have resulted in a post-money valuation of approximately $1 billion for MNT-Halan.
  2. Investors and Stakeholders:

    • Abu Dhabi–based Chimera Investments has played a significant role by providing about $200 million in equity, acquiring a 20% stake in MNT-Halan.
    • The International Finance Corporation (IFC) has disclosed a $40 million investment in the company.
    • Additional capital of $60 million is anticipated, with participation expected from existing shareholders.
  3. Strategic Moves and Partnerships:

    • MNT-Halan plans to expand internationally, leveraging a swap agreement between its super app Halan and Netherlands-based microlending platform MNT Investments.
    • In 2021, a swap agreement was established between Halan and MNT Investments to provide financing solutions for the underbanked and unbanked in Egypt.
  4. Business Model and Offerings:

    • MNT-Halan operates a digital ecosystem connecting consumers, merchants, and micro-enterprises, offering business loans, consumer finance, payments, Buy Now, Pay Later (BNPL), and e-commerce services.
    • The company's digital wallet provides bill payments, e-commerce, ride-hailing, as well as micro, nano, and consumer loans.
    • The acquisition of Talabeyah, a B2B e-commerce platform, allows MNT-Halan to provide loans to small merchants and retailers, creating a comprehensive ecosystem.
  5. Lending Operations and Financial Performance:

    • MNT-Halan has demonstrated that lending is its primary business, having disbursed over $2 billion in loans to date.
    • The company has a focus on serving the underbanked and unbanked population in Egypt.
    • The two securitizations totaling $140 million, secured in the past year, have supported MNT-Halan's lending operations.
  6. Revenue and Market Position:

    • MNT-Halan claims to have generated over $300 million in revenue in the previous year, representing a 3.4x multiple on its unicorn valuation.
    • The company is positioned as Egypt's only private billion-dollar fintech company.
  7. Competition and Market Differentiation:

    • While facing competition in certain sectors, MNT-Halan asserts itself as the largest and most technologically advanced player in the underbanked market.
    • The company aims to differentiate itself by creating a fully-fledged ecosystem for the underbanked, encompassing various services.
  8. Future Plans and Mergers:

    • MNT-Halan plans to launch a debit card for its customers by the end of March.
    • Exploring mergers and acquisitions is part of the company's strategy to consolidate its position in Egypt's fintech and e-commerce space.

In conclusion, MNT-Halan's success in securing substantial funding, strategic partnerships, and its evolution into a comprehensive fintech ecosystem showcases its prominence in the Egyptian market, addressing the financial needs of the underbanked and unbanked population.

Egyptian financial services provider MNT-Halan valued at $1B in $400M funding | TechCrunch (2024)


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