Mobility solutions provider Comviva, a subsidiary of Tech Mahindra Ltd, Tuesday announced that it has divested its stake in mobile payments switch TerraPay to a consortium of global investors for an undisclosed amount.
TerraPay was incubated by Comviva in 2015.
“Prime Ventures and Partech Partners are co-investing in TerraPay, along with International Finance Corporation (IFC), a member of the World Bank Group. Apart from acquiring Comviva shares, the investors have further invested $9.6 million in TerraPay to fund the company’s expansion,” Comviva said in a statement.
In a disclosure last April, IFC had said that it intends to invest up to $8.1 million in exchange for preferred Series A shares of TerraPay. However, IFC’s actual contribution to the latest financing could not be ascertained.
“Market for international money transactions has changed rapidly over the past few years. The evolving regulatory framework constrained the growth of TerraPay and made it imperative to step out of Comviva fold. We have taken a strategic decision to divest TerraPay business and are confident that this change is in the best interest of all the stakeholders. We shall continue to take such strategic initiatives and leverage our start-up factory for fueling future growth,” Manoranjan Mohapatra, Chief Executive Officer, Comviva said.
The new consortium of investors will enable TerraPay to execute its strategy to scale operations as a hub enabling interoperable, real-time, cross-border transactions between telecom and mobile money operators. This will help TerraPay scale its payment infrastructure services to clear and settle international payments faster, enable instant payments across operators’ interoperable networks, and remove a significant barrier for transfers to mobile money accounts, Comviva said.
TerraPay is a real-time, low-value payments network, which connects all financial instruments globally. The company enables the interoperability of mobile wallets in international, regional and domestic markets. Since its start in 2015, TerraPay claims to have acquired more than 25 licenses to operate in over 60 countries in Africa, Asia and Europe, and is expanding globally.
In 2016, TerraPay acquired UK-based Pay2Global with an aim to expand its footprint in the European market. In 2018, TerraPay teamed up with Western Union to help the latter expand account payout network in Europe, Africa, Latin America, and Asia.
It has also partnered with private sector lender Yes Bank to enable real-time money transfer to bank accounts in India. Last February, it partnered with Pan Asia Bank to make instant cross-border money transfer to all bank accounts in Sri Lanka.
Paulo de Bolle, IFC’s Global Director, Financial Institutions Group, said: “By adding TerraPay to IFC’s growing fintech investment portfolio, we are supporting the company to grow and expand while helping to lower the costs and streamline the process to send money home. Fintechs like TerraPay play a vital role in increasing financial inclusion in emerging markets.”