Egyptian financial services provider MNT-Halan valued at $1B in $400M funding

This article tells the story of MNT-Halan, Africa's newest unicorn from Egypt.

MNT-Halan-founders Mounir Nakhla and Ahmed-Mohsen. Image Credits: Forbes

Egyptian fintech and e-commerce platform MNT-Halan has received $400 million in funding from local and international investors. The round includes $260 millionn in equity financing and $140 million in securitized bond issuances. Abu Dhabi-based Chimera Investments provided the majority of the equity funding ($200 million) in exchange for a 20% stake in the company. MNT-Halan is also in the process of raising an additional $60 million.

The fintech firm provides financing solutions to underbanked and unbanked customers and operates a digital ecosystem connecting consumers, merchants and micro-enterprises to business loans, consumer finance, payments, and e-commerce offerings. In 2021, the company raised $120 million from private equity firms and venture capitalists. CEO Mounir Nakhla said the company is now the largest lender to the unbanked in Egypt, with loans exceeding $2 billion. The company plans to expand internationally and launch a debit card for customers by the end of March.

A significant portion of the equity, estimated to be around $200 million, was funded by Chimera Investments, a company based in Abu Dhabi. In exchange for this investment, the firm received a 20% stake in the Egyptian digital lending and e-commerce platform. The company is also in the process of raising an additional $60 million in the near future. The International Finance Corporation recently announced an investment of $40 million, however, the company declined to comment. The remaining financing is likely to come from current shareholders.

In a press release, MNT-Halan says the investments “demonstrate continued confidence in its value proposition, management team, and superior technology.” The company also plans to expand internationally after solid growth in Egypt and progress on the swap agreement between super app Halan and Netherlands-based microlending platform MNT Investments.

In 2021, Halan, a company that operated a digital wallet providing services such as bill payments, e-commerce, ride-hailing, and various loan options, agreed with MNT Investments (a microlending platform based in Egypt with a history dating back to 2010) to offer financial solutions to underbanked and unbanked individuals. The two companies joined forces in 2018 through a leveraged buyout deal, resulting in a new company name: MNT-Halan. Based in Egypt, its digital platform connects consumers, merchants, and micro-enterprises, offering business loans, consumer finance, payments, buy now pay later, and e-commerce services powered by its proprietary technology, Neuron.

In 2018, Halan, a digital wallet company providing various services such as bill payments, ride-hailing, e-commerce, and loans, merged with MNT Investments, a microlending platform based in Egypt with a history dating back to 2010. The combination of these two companies resulted in the creation of a new entity called MNT-Halan, which is based in Egypt. Its digital platform offers a range of financial solutions to underbanked and unbanked individuals by connecting consumers, merchants, and micro-enterprises. The platform offers business loans, consumer finance, payments, "buy now pay later" options, and e-commerce services, all powered by its own technology, known as Neuron.

MNT-Halan's impressive lending operations are attributed to the two securitizations it secured, worth a total of $140 million, through its subsidiary Tasaheel. These funds were obtained through a securitization program with Commercial International Bank (CIB), Egypt's largest private sector bank. The company has the potential to securitize up to $250 million more. Other financial institutions involved in the program include Abu Dhabi Commercial Bank, Al Ahli Bank of Kuwait, Al Baraka Bank, and the National Bank of Egypt.

MNT-Halan primarily earns revenue from lending, which is its main business, but what sets it apart is the digital ecosystem of products it has built around it. The company has integrated e-commerce, FMCG delivery, and mobile POS payments into its lending operations.

For example, last June MNT-Halan acquired Talabeyah, a B2B e-commerce platform that provides FMCG supplies to small merchants and retailers with next-day delivery. This allowed the company to offer loans to these merchants, who then act as mobile agents for individual customers who shop at their stores. The company is also seeking to expand grocery shopping, as well as other e-commerce offerings such as electronics and personal items, to individual customers.

“We’re capitalizing on our existing distribution through million-plus customers and adding services within our ecosystem,” said the chief executive. “If you need a loan for your business, we’re going to give you one; you need a loan for consumption, we’re going to give you one; you need to order groceries or buy a mobile phone on our platform, we’ll deliver it to you via our e-commerce stores. Also, we can give them the credit they can use to make all of these purchases within the ecosystem.”

MNT-Halan provides loans to small business owners and individuals who require financial assistance to run their businesses. The Egyptian-based startup says that its digital platform serves over 5 million customers in Egypt, with 3.5 million being financial clients and 2 million being borrowers. MNT-Halan aims to launch a debit card for its clients by the end of March.

According to Nakhla, the company's focus on commerce and lending resulted in the shutdown of its ride-hailing services, which were one of Halan's core offerings prior to the merger but were struggling to compete with international ride-hail companies like Uber, Careem, and inDriver. MNT-Halan faces competition from Khazna, Paymob, and MaxAB in its other products.

“In some sectors, we do have competition. But in the most important sector, we’re the largest, and no one is as advanced in technology or creates a fully-fledged ecosystem for the underbanked. I think this is where we differentiate ourselves from any other player in the market,” the CEO said when asked about the competition in Egypt and mentioned that the company is looking into mergers and acquisitions as a way to strengthen their standing in the financial technology and online commerce sectors.

According to Nakhla, MNT-Halan had to raise its revenues and establish new sources of income in order to secure the required funds in the current venture capital market. The fintech firm reportedly generated more than $300 million in revenue last year, resulting in a modest multiple of 3.4 times its unicorn valuation, which is in line with recent public market assessments as reported by TechCrunch. It's worth noting that MNT-Halan is Egypt's only privately-held billion-dollar company; payments company Fawry reached that valuation after going public in 2019, although its value has since decreased significantly.

“We are thrilled to be part of Egypt’s greatest fintech success story,” said Seif Fikry, CEO of Chimera Abu Dhabi, in a statement. The success and growth of MNT-Halan is due to the leadership's successful implementation of their unique vision to modernize their traditional business by incorporating advanced technology and expanding their product offerings for their specific customer group.