Kenyan-based financial technology firm, Cellulant Corporation, is now valued at $105 million, following the recent sale of some 44.4% stake in the company to TPG’s Rise Fund, an American investment company.
This development was announced last week in a report that was filed with the Competition Authority of Kenya (CAK).
Cellulant first hinted at this deal in May 2018, when it announced that it had secured a $47.5 million Series C funding from the American private equity firm, Rise Fund.
The venture capital was raised to make to enable the company scale up digital payments across Africa. Thi is biggest fund ever raised by a Kenyan technology firm.
According to the report by the Competition Authority of Kenya, the investment from the US company also involves co-investment firm, Endeavor Catalyst, and Africa-focus equity firm, Satya Capital.
About Cellulant Corporation
The company is a Payment Platform Infrastructure Service Provider (PPISP) co-founded by Kennedy Njoroge and Bolaji Akinboro. The company provide platform that powers the internet of payments, ensuring easy, reliable, and secure access to mobile and payment services from mobile phone.
Since its establishment in 2004, Cellulant has dedicated resources to provide solutions to everyday payment challenges across Africa, opening branches in 11 sub-saharan countries namely: Kenya, Nigeria, Ghana, Uganda, Zambia, Mozambique, Tanzania, South Africa, Zimbabwe, Botswana and Malawi.
The financial services company currently partners twenty eight mobile operators, some thirty one banks, and more than two hundred blue chip companies.
A recent company report shows 15 million Nigerian farmers under the Growth Enhancement Support Scheme in Nigeria utilizes Cellulant’s ecosystem to make equity contributions to about 2500 agro-dealers and 223 upstream operators.
Also, Liberia Ministry of Agriculture for the Liberia Agriculture Transformation Agenda in conjunction with the African Development Bank (AfDB) are collaborating with Cellulant to leverage on e-wallet technology to serve over 318,000 farmers.
About TPG Rise Fund
TPG Rise Fund is an investment firm that focuses on global and social development through funding. Based in United States, the company provides financial opportunities to companies, including small and medium enterprises, with objectives to have a social impact on growth and community development.
The venture capital firm formed in 2017 by TPG Growth, was co-founded by William E. McGlashan, Paul David Hewson, Jeffrey Stuart Skoll and Akinyemi Lalude to achieve measurable, positive social and environmental outcomes, with focus on competitive financial returns.
Rise Fund invests in agriculture, information, telecommunications, education, healthcare, technology, energy, food, financial services, growth infrastructure, and media.
The company’s $47.5 million deal with Cellulant is rated as the largest involving a fintech company with African focus.
Hedge funds, institutional investors rush to own stakes in Bitcoin
Hedge funds are firms that offer alternative investments to a specific type of investors (high net worth individuals), in a bid to protect their investment portfolios from market uncertainty, while generating positive returns regardless of market sentiments.
With global economic uncertainty gradually becoming a daily norm, institutional and hedge funds around the world have been rushing to have a stake in crypto assets which all have been outperforming other financial assets in 2020).
Just recently, a popular hedge fund based in New York –Grayscale Investments –caught the investment world by surprise by buying up Bitcoin (BTC) at a great rate in recent months.
Lennard Neo, the head of research at Stack Funds, told Cointelegraph that institutional investors have been seeking for other options, not just to provide returns, but also to hedge their existing portfolio from downside risks. Neo said:
“Similar to Grayscale, Stack has seen an uptick in investors’ interest — almost double that figures of pre-crash in March — in Bitcoin. I would not say they are ‘gobbling up BTC’ blindly but cautiously seeking traditional structured solutions that they are familiar with before making an investment.”
In addition, Paul Cappelli, a portfolio manager at Galaxy Fund Management, explained in detail the reasons for this demand. According to him, “we’re seeing increased interest from multiple levels of investors’ wealth channels, independent RIAs, and institutions.
“The recent BTC halving came at an interesting time amid the COVID-19 outbreak and the growing unease about quantitative easing. He noted: “It clearly demonstrated BTC’s scarcity and future supply reduction as concerns deepened around unprecedented stimulus by the Fed with the CARES Act.”
Also, Michael Sonnenshein, the Managing Director of Grayscale Investments, explained briefly why his firm uses Bitcoin as an option in hedging its firm’s portfolio position.
“All three are facing issues this time around. Bitcoin has emerged as an alternative hedge, operating independently of the dramatic monetary policies enacted by central banks,” he said.
What you need to know about Hedge Funds
They are firms that offer alternative investments to a specific type of investors (high net worth individuals), in a bid to protect their investment portfolios from market uncertainty, while generating positive returns regardless of market sentiments.
Measures introduced by Nigeria to ensure transparent use of the $3.4 billion IMF loan
Most of the critics of the government’s borrowing pattern have often expressed serious doubt about the judicious use of these funds, as they believe most of them might end up being embezzled.
Following the approval and disbursement of $3.4 billion Rapid Financing Instrument (RFI) to Nigeria, which is the largest COVID-19 emergency financing package so far released by the International Monetary Fund (IMF), the multilateral financial institution now expects transparent and accountable use of the funds.
The IMF’s financial assistance to Nigeria is meant to support the healthcare sector, stabilise the economy, and protect jobs and businesses that have been severely impacted by the pandemic.
The Bretton wood institution has been disbursing funds to work closely with member countries to ensure transparent and judicious use of the financial support, while making sure they are used for the intended purpose.
The IMF’s mission chief for Nigeria, Amine Mati, during a conversation, pointed out the measures to be taken by Nigeria in order to enhance transparency and governance in the use of the $3.4 billion IMF emergency financing.
According to the IMF chief, the Nigerian Government had committed to undertake an independent audit of crisis mitigation spending and related procurement processes, as well as to publish procurement plans and notices for all emergency response activities which include the names of companies that were awarded the contracts and the beneficial owners.
Mr. Mati also disclosed that special budget lines are to be created to record all crisis emergency response measures, which are published daily on Nigeria’s treasury online portal. These measures will not only ensure that financial assistance received as part of the COVID-19 response is used for its intended purposes, but will also significantly strengthen the oversight of the entire budget used for the government’s crisis response.
— IMF (@IMFNews) May 31, 2020
Implementing these measures will help to drastically reduce the governance and transparency challenges as well as corruption vulnerabilities of a country like Nigeria. Most of the critics of the government’s borrowing pattern have often expressed serious doubt about the judicious use of these funds, as they believe most of them might end up being embezzled.
Brent crude drops, as traders focus on OPEC+ meeting
OPEC+ agreed in April to reduce output by an unprecedented 9.7 million barrels per day in May and June after the deadly COVID-19 pandemic weakened demand.
Brent crude price dropped by around 0.77%, to $37.55 a barrel, on the first trading session of June.
The slump in the price comes after it posted its strongest monthly gains since 1999.
“The focus is very much on OPEC+,” OCBC economist, Howie Lee, told Reuters referring to OPEC and its allies including Russia. OPEC+ agreed in April to reduce output by an unprecedented 9.7 million barrels per day in May and June after the deadly COVID-19 pandemic weakened demand.
“We might see a cautious pullback in (crude) prices given that downstream prices haven’t caught up … but if OPEC+ does come up with a three-month extension, there’s a possibility that prices may hit the $40 level,” Howie Lee added.
Algeria, which presently holds the OPEC presidency, has started a move that an OPEC+ meeting scheduled for June 9-10 be brought forward to ease oil purchases for countries such as Saudi Arabia, Iraq, Kuwait, and Russia, who raised no objection.
“It’s been widely interpreted as likely to lead to an extension of the current production cuts,” CMC Markets’ chief market strategist, Michael McCarthy, said.
“Oil prices have come down slightly in our session but they’re still at elevated levels. I suspect that’s the key driver of prices on Friday night and should keep prices reasonably well supported today,” McCarthy added.