MNT-Halan Expands into Turkey with Acquisition of Tam Finans and Secures $157.5M Funding: A Major Leap in Global Fintech Growth and Microfinance Services

MNT-Halan Expands into Turkey with Acquisition of Tam Finans and Secures $157.5M Funding: A Major Leap in Global Fintech Growth and Microfinance Services
Image credit: Digital Economy 

MNT-Halan, a leading Egyptian fintech unicorn, has raised $157.5 million in funding to acquire Turkish fintech Tam Finans, aiming to expand its reach and consolidate its position in the fintech sector. Tam Finans, which provides financing to micro-enterprises and SMEs, operates 39 branches across 26 cities in Turkey and holds a 40% market share.

The combined entity will have a loan book just shy of $1 billion, according to MNT-Halan's CEO, Mounir Nakhla. While the exact financial terms of the deal were not disclosed, part of the acquisition involved shares. Actera, a major private equity firm in Turkey, and the London-based European Bank for Reconstruction and Development (EBRD), who jointly own Tam Finans, will become shareholders in MNT-Halan.

This latest funding round comes 19 months after MNT-Halan's previous raise of $400 million in equity and debt, which valued the company at $1 billion. Although the exact valuation in the latest round is undisclosed, it exceeds $1 billion. Tam Finans had raised over $30 million through debt since its inception, as reported by PitchBook.

Nakhla, who co-founded MNT-Halan with CTO Ahmed Mohsen, shared that discussions with Tam Finans began about 18 months ago. The acquisition provides a strategic entry into the Turkish market, which has a GDP of around a trillion dollars and a large population. MNT-Halan plans to leverage Tam Finans' size, distribution networks, and management expertise to establish a strong presence in Turkey. This move aligns with MNT-Halan's goal to capitalize on its core banking system product, Neuron, and other services.

Tam Finans specializes in "invoice factoring," an alternative financing method for MSMEs, where it purchases businesses' outstanding invoices for upfront cash. It has a credit scoring system that enables it to digitally approve and disburse loans to over 20,000 active businesses, maintaining a loan portfolio of about $300 million. MNT-Halan, which recently obtained a factoring license, plans to enter this space in Q4 2024 to complement its small and micro-business lending operations.

MNT-Halan has disbursed over $4.5 billion in loans, serving more than 7 million customers in Egypt. Lending is its primary business and revenue generator, but it also offers consumer finance, prepaid cards, e-wallets, savings, payments, e-commerce, FMCG delivery, and mobile POS payments. In April, MNT-Halan launched a super app to consolidate these services, with the prepaid card product showing significant growth.

MNT-Halan claims to have issued over 130,000 cards since the launch of its super app, with 1,000 to 2,500 cards issued daily. The company reported over $300 million in revenue in 2022, with a 35% year-over-year growth rate since then. It projects combined entities' revenues to reach between $500-600 million in 2024, despite the devaluation of the Egyptian pound.

This acquisition follows MNT-Halan's expansion into Pakistan in March, where it acquired a microfinance bank. The company is exploring further expansion opportunities, supported by the latest growth investment from existing investors including DPI, Lorax Capital Partners, funds managed by Apis Partners LLP, Lunate, and GB Corp. The round also included $40 million from the IFC, a World Bank subsidiary.

In summary, MNT-Halan's acquisition of Tam Finans and the secured funding signify a major expansion into Turkey, enhancing its microfinance services and global fintech presence.