Channel VAS is the premium FinTech provider of mobile financial services, airtime credit & airtime advance services, handset loans and big data analytics, all through cutting edge proprietary analytics tools.
Operating since 2012 and expanded to more than 42 countries in Africa, Middle East, Asia and LATAM with a focus in emerging markets, Channel VAS supported mobile network operators (MNOs) and financial institutions to provide over R204 million ($12 million) credit daily to more than 750 million people in 2020 and continues to expand to new markets globally.
The company, which is valued at R548 million in 2020 versus R423 million in 2019, is 20% owned by South Africa’s private equity firm Ethos.
Channel VAS has shown strong operational growth during the past 12 months, Ethos informed investors on Monday.
Channel VAS saw 40% growth in EBITDA in rand terms to June 2020 broadly across territories and customers.
The firm added that Channel VAS has no debt.
Ethos received R22 million in dividends during the year.
Strong operational performance has continued despite COVID-19 Pandemic
“Business largely unaffected by COVID although impact on Nigerian economy has an indirect impact on profitability (due to forex conversion),” said the company.
“Business continues to experience strong demand for its products. It is focused on further operational efficiencies and new product / customer deployments.”
Ethos said it saw early indications of positive progress in Micro Finance Services (MFS) for Channel VAS, which has expanded into MFS leveraging its existing credit scoring capability and access to data.
In late September 2017, Channel VAS announced that Waha Capital, an investment company based in Abu Dhabi has acquired a minority stake in Channel VAS. This acquisition serves to build a strategic and integrated partnership, promoting the expansion of rapidly growing Channel VAS’ footprint globally while doing so will also provide diversified investment and industry exposure for Waha Capital.
In November 2018, another major investment partner joined Channel VAS. Ethos, a South African investment company agreed on investing in the leading Mobile Financial and data analytics firm. This is the first investment from Ethos’ latest large-buyout fund, Ethos Fund VII and this venture is set to further support the expansion of rapidly growing Channel VAS’ footprint globally, while at the same time opening the Mobile Financial sector to Ethos.
Ethos Fund VII (EF VII) is the successor equity fund for EF VI (which is now fully invested) and had its first close in October 2018. Shortly after closing, the Fund completed its first investment into Channel VAS, an airtime credit service provider with operations and contracts with mobile network operators across 28 countries in Africa.
Earlier in October 2020, the Ethos consortium (including EF VII, EAiF I and EDI) increased its stake in Channel VAS by 2.5% to 20% for a net amount of R38 million (net of dividends declared and withheld as part of the funding) (Ethos Capital’s share of the investment through these Funds was R20 million).