MICROCAPITAL BRIEF: South Africa’s MFS Africa Lands $14m in Equity from Equator Capital’s ShoreCap III Fund, FSD Africa, Goodwell Investments, Lun Partners to Boost Mobile Financial Services in Rural Areas

South Africa-based financial technology (fintech) company MFS Africa recently raised equity totaling USD 14 million to expand its mobile financial services (MFS) into additional rural areas in Africa. The investors, which are participating in undisclosed portions, are US-based impact fund manager Equator Capital Partners, through its ShoreCap III fund; China-based investment manager Lun Partners Group; Netherlands-based impact investor and advisory firm Goodwell Investments; and Financial Sector Deepening (FSD) Africa, which is funded by the UK government. Founded in 2009, MFS Africa connects 170 million people across sub-Saharan Africa via “money transfer organizations, banks and other financial institutions, enabling money remittances to and from mobile money accounts.”

Between 2003 and 2014, Equator invested USD 28 million in 15 financial institutions through the ShoreCap International fund. In 2009, Equator raised USD 80 million for ShoreCap II, which it invested in 10 firms, two of which it has exited as of 2018. ShoreCap III has a target volume of USD 150 million to be invested over 10 years in about 15 African companies offering services such as microcredit, microinsurance, leasing, housing finance, and banking for small and medium-sized enterprises. ShoreCap III was launched in December 2017, and MFS Africa marks its first investment.

The FSD network includes Access to Finance Rwanda; Nigeria’s Enhancing Financial Innovation and Access; Ethiopia’s Enterprise Partners; FSD Kenya; FSD Moçambique; FSD Tanzania; FSD Uganda; FSD Zambia; FinMark Trust, which is active in Southern Africa; and FSD Africa, which works across sub-Saharan Africa. The sizes of the organizations’ budgets is unavailable.

Goodwell Investments has offices in the Netherlands and South Africa. The firm invests in agribusiness and companies serving people with low incomes. Goodwell has a total of 25 investees with 30,000 employees serving 12 million households in Africa and India.

Lun Partners, which was established in 2016, is active in venture capital, private equity, wealth management and financial advisory services. The firm also has engaged in development finance in partnership with organizations such as the World Bank Group’s International Finance Corporation (IFC) and the US-based Bill and Melinda Gates Foundation.

By Michelle Fleming, Research Associate

Sources and Additional Resources

Press release provided to MicroCapital by Equator Capital

MFS Africa homepage
http://mfsafrica.com

MFS Africa financial information
https://www.crunchbase.com/organization/mfs-africa

Equator homepage
http://www.equatorcap.net

FSD Africa homepage
https://www.fsdafrica.org

Goodwell Investments homepage
https://www.goodwell.nl

Lun Partners Group homepage
http://lunpartners.com

ShoreCap funds description
http://www.equatorcap.net/about

ShoreCap III additional material
https://www.cdcgroup.com/en/our-investments/fund/shorecap-iii/

MICROCAPITAL BRIEF: Equator Raises $62m for ShoreCap III from AfDB, CDC, EIB, KfW, OeEB to Invest in Financial Inclusion in Africa
https://www.microcapital.org/microcapital-brief-equator-raises-62m-shorecap-iii-afdb-cdc-eib-kfw-oeeb-invest-financial-inclusion-africa/