MTN Group, Africa’s largest telecommunication service provider, is actively looking for fintech startups to acquire and integrate into its ecosystem, as it looks to secure long-term growth across its African markets. The company is increasing its focus on fintech companies as a new revenue growth engine as pressure continues to mount on voice and data revenues.
The telecom giant has more than 300 million subscribers across the continent, and this number has eventually made it one of the largest customer bases in Africa. However, telecom services alone are no longer delivering the returns they once did. Market saturation, rising operating costs, and intense competition have forced operators to look for new revenue streams.
Financial services present that opportunity. According to MTN CEO Ralph Mupita, hunting for fintech startups to acquire is part of the strategies to transform the company from a traditional telco into a diversified tech powerhouse. Mupita says the company is targeting three specific verticals for its fast-growing fintech arm, including payments, lending, and remittances.
MTN’s fintech push started with the inception of mobile money (MoMo), which has experienced significant growth in several countries under the MoMo brand. MTN MoMo has become a daily tool for payments, transfers, and bill settlements. But consumer expectations have evolved. Customers now want access to credit, savings, insurance, merchant payments, and cross-border remittances.
However, it's important to know that building a fintech company from scratch can be very slow and expensive. Meanwhile, acquiring fintech companies directly allows MTN to scale faster. The aspiring fintech companies will already have the technology, regulatory approvals, licences, and specialised talent required to operate in complex financial markets.
Mupita says this strategy isn’t a “buy-and-flip” private equity play, meaning if the acquisition is successful, it'll integrate directly into MTN’s existing platform to improve customer experience or add new capabilities. Scale is another major factor; with over 300 million subscribers, MTN has a distribution advantage that most fintech startups lack.
In fact, MTN can roll out new financial products to millions of users almost instantly. This improves adoption rates and accelerates revenue growth. Notably, MTN is not the only telecom eyeing the use of fintechs to defend market position. While independent fintech companies continue to expand across Africa, other telecom operators are investing heavily in financial services.
For MTN, the acquisitions will help the company to defend its market position and prevent competitors from capturing its customer base. In addition to that, funding for African fintech startups has slowed in recent years, and that has led to lower valuations and fewer exit options. For MTN, this creates a favourable environment to acquire quality businesses at more reasonable prices.
To further back this move, MTN has been gradually restructuring its fintech operations in some markets by separating them from its core telecom business. This approach makes the subsidiaries more attractive to investors and strategic partners. The restructures also allow the company to operate with flexibility. In a nutshell, MTN's interest in acquiring fintech companies reflects the company's bet that the future lies at the intersection of connectivity and financial services.
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