MFS Africa has signed an agreement to acquire Capricorn Digital, Baxi’s parent business, for an undisclosed sum.

Capricorn runs a digital payment network under the Baxi brand, which caters to small and medium-sized businesses. The company was founded in 2014 by Degbola Abudu. Its service is designed to assist Nigerians with daily financial demands like utility bill payments, airtime purchases, TV bills, and data subscriptions, withdrawals, and money transfers.

These services are provided through the company’s retail network of agents and merchants in some of Nigeria’s most remote regions, through its BaxiBox POS, BaxiPay, Baxi MPoS Device, and BaxiRIMS products.

What you should know

Capricorn Founder and CEO, Degbola Abudu told Techcabal that the deal, which is subject to approval from the Central Bank of Nigeria, CBN, will become the second-highest fintech acquisition in Nigeria to date behind the $200 million Stripe paid for Paystack last year.
The 100% cash acquisition will see MFS grow into Africa’s largest economy where its footprint has been constrained due to the country’s limited number of mobile wallets. Capricorn will now be known as MFS Africa, but its flagship product, Baxi, will remain the same.
Baxi will also become a major node on MFS Africa’s digital payment network, allowing users to send and receive cross-border payments to and from Nigeria, similar to what it has done with mobile money providers across Africa. MFS Africa will also expand Baxi’s offline SMEs offering to a limited number of markets within its coverage.
Dare Okoudjou, a Beninese national, founded MFS Africa in 2009. The company is one of Africa’s largest fintech interoperability hub, linking banks, telecoms, and money transfer companies via a single Application Program Interface in over 35 countries (API).

What they are saying

Speaking on the acquisition, Degbola Abudu, Baxi CEO said, “We’re thrilled to partner with the MFS Africa team to expand our service offering for individuals and SMEs. We believe that we’ve barely scratched the market’s potential. Only 3% of Nigerian SMEs have access to credit products. By teaming up with MFS Africa, and with the strong support of our local commercial banking partners, we can offer more value-added products and services, such as cross-border payments, to support Nigerian SMEs in their growth.”

Dare Okoudjou, MFS Africa’s founder and CEO said, “This deal is a pivotal step in our journey. By combining Baxi’s network of SMEs operating as agents with our pan-African network, we aim to take Nigeria’s SMEs to the rest of Africa and the world. Our expansion into Nigeria brings us one step closer in our mission of making borders matter less.”

MFS Africa intends to engage with Nigeria’s central bank and other regulators to get any additional licenses required to run its full-service products in the country, including remittance, micro-lending, and insurance, as well as explore commercial partnerships.