MNT-Halan Secures $157.5M and Acquires Turkish Fintech Tam Finans for Strategic Expansion

Egyptian fintech unicorn MNT-Halan has announced a major step in its growth journey with the acquisition of Turkish fintech Tam Finans. This move, supported by a fresh $157.5 million funding round, aims to expand MNT-Halan's microfinance and payments services into Turkey.

Strengthening Financial Services

Tam Finans, known for providing financing to micro-enterprises and SMEs across 39 branches in 26 Turkish cities, holds a significant 40% market share in Turkey. With this acquisition, the combined entity’s loan book will approach nearly $1 billion, as shared by MNT-Halan’s CEO, Mounir Nakhla.

Strategic Investments and Partnerships

While the financial terms remain undisclosed, the deal involves shares, bringing Actera and the European Bank for Reconstruction and Development (EBRD) as shareholders in MNT-Halan. This strategic investment follows MNT-Halan’s previous $400 million equity and debt raise, which included Chimera Investments acquiring a 20% stake for $200 million, pushing the company's valuation above $1 billion.

Expanding Horizons

Nakhla, who co-founded MNT-Halan with CTO Ahmed Mohsen, revealed that discussions with Tam Finans began 18 months ago. Turkey, with its trillion-dollar GDP and large population, presents a lucrative market for expanding MNT-Halan's diverse product portfolio, including their core banking system, Neuron, and various backend and app development services.

Innovative Financial Solutions

Tam Finans specializes in "invoice factoring," providing upfront cash for businesses' outstanding invoices. Their credit scoring system digitally approves and disburses loans to over 20,000 active businesses, with a loan portfolio totaling approximately $300 million. MNT-Halan recently secured a factoring license and plans to enter this space by Q4 2024.

Market Impact and Future Growth

To date, MNT-Halan has disbursed over $4.5 billion in loans, serving more than 7 million customers in Egypt. The company's offerings extend beyond lending to include consumer finance, prepaid cards, e-wallets, savings, payments, e-commerce, FMCG delivery, and mobile POS payments, all consolidated under a newly launched super app.

Nakhla highlighted the growth of their prepaid card product, inspired by Nubank, with over 130,000 cards issued in four months and daily issuance rates between 1,000 and 2,500 cards.

Financial Performance

MNT-Halan reported over $300 million in revenue in 2022, with a 35% year-over-year growth despite the Egyptian pound's devaluation. The company projects combined entity revenues to reach $500-600 million in 2024.

Strategic Moves and Future Plans

The acquisition of Tam Finans follows MNT-Halan’s expansion into Pakistan and hints at further significant moves. The recent funding from existing investors, including DPI, Lorax Capital Partners, funds managed by Apis Partners LLP, Lunate, GB Corp, and $40 million from the IFC, will support these growth initiatives.