REG - EFG-Hermes Holdings - Tanmeyah Acquires Tech-Driven B2B Platform Fatura

EFG Holding SAEAnnouncement

15/06/2022 14:00

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RNS Number : 0094P  EFG-Hermes Holdings SAE  15 June 2022

Tanmeyah Successfully Acquires Fast-Growing Tech-Driven B2B Platform Fatura

 

-     Dr. Rania A. Al-Mashat, Minister of International Cooperation: The
deal reflects the success of the investments of Egypt Ventures in supporting
emerging companies and promoting their development in a way that stimulates
economic growth and enhances the participation of the private sector in
economic development

-     The strategic acquisition aims to fuel Tanmeyah's digital
transformation

-     This falls in line with Tanmeyah's strategy to offer more innovative
products in the ever-growing Egyptian microfinance landscape and sets the
stage for its next phase of growth

 

Cairo, June 15, 2022

 

Tanmeyah for Microfinance Services, a wholly-owned subsidiary of EFG Hermes
Holding and Egypt's leading provider of microfinance solutions, announced
today that it has successfully concluded the acquisition of Fatura Netherlands
B.V. ("Fatura").

 

Fatura is a fast-growing tech-driven Business-to-Business (B2B) platform with
a regional footprint of 22 governorates in Egypt. Fatura is backed by
prominent shareholders in the field with EFG EV Fintech being one of the
primary investors since 2020. The platform brings together retailers,
manufacturers, and wholesalers in one place. Fatura offers its users a
multitude of innovative services, ranging from a marketplace with live product
viewing and price transparency to B2B buy now pay later services and marketing
support services.

 

Commenting on the deal, Minister of International Cooperation, H.E. Dr. Rania
A. Al-Mashat, said, "Tanmeyah's acquisition of Fatura, backed by Egypt
Ventures, and its accelerator "EFG EV Fintech", which is a partnership with
EFG Hermes Holding, comes in line with the Government of Egypt's efforts to
increase the involvement of, and to empower, the private sector, as a major
driver of comprehensive and sustainable economic growth." Al-Mashat added that
Egypt Ventures, the first venture capital company in Egypt with a government
contribution, has succeeded in maximizing the return on investment in many
pioneering emerging companies in their fields. This exit is a confirmation
that the investment in Fatura has paid off and enabled the company to move
forward in developing the volume of its business. Moreoever, Egypt Ventures,
and its two business accelerators, have invested in more than 175 companies
since 2017, and the coming period will witness more success stories in
supporting start-ups and exits that enhance the participation of the private
sector in economic development.

 

Commenting on the acquisition, Karim Awad, Group CEO of EFG Hermes Holding
said, "This acquisition marks a major milestone for Tanmeyah, which has grown
to become a key player under our Non-Bank Financial Institutions (NBFI)
platform. Tanmeyah turned to this strategic acquisition to bolster its digital
transformation and enrich its product and service offerings to become more
holistic and support Egypt's microfinance space. I am proud that all our NBFI
brands continue to fuel the drive for digital transformation in Egypt as we
continue building synergies by means of effective cross-selling, which helps
diversify the offerings across our product and service portfolio, further
supporting financial inclusion. We've always seen potential in Fatura, and we
are firm believers in its ability to innovate in the B2B digital space, which
is why our very own EFG EV Fintech made the decision to become one of the
early investors in the company years ago."

 

The consolidation of Tanmeyah and Fatura as complementary businesses presents
an opportunity for both to offer competitive and innovative solutions to the
market. The deal fits within Tanmeyah's digital transformation strategy to
drive business growth by leveraging Fatura's platform to introduce new and
disruptive financial products. It also allows Tanmeyah to access Fatura's
fast-growing network of merchants and fill a large gap in the B2B credit
market. Tanmeyah's extensive geographical presence and broad client base will
help Fatura expand its network of merchants and venture into new sectors of
the B2B market, while its solid financial position and access to funding will
help bolster Fatura's growth.

 

Hossam AlNaggar, CEO of Tanmeyah, also commented on the acquisition saying "We
are extremely proud of this transaction. Fatura is a key addition to
Tanmeyah's portfolio, as it offers the company a faster route to digitally
transform and develop. Our new consolidated product and service offerings
confirm our focus on supporting the Egyptian economy from the ground up as
they will aid microenterprises in ordering inventory from wholesalers through
a one-of-a-kind digital marketplace. We see a huge financing gap in the B2B
segment and, by joining forces, we will be able to power digital lending and
cover more sectors in Egypt. Microfinance continues to play a key role in
helping low-income households to access opportunities, stabilize their income
flows, and cope with inflationary pressure."

 

By the end of 1Q22, Tanmeyah's total number of clients had grown to reach a
record high of 391,000 and its portfolio reached c. EGP 3.9 billion - its
highest level since inception.

 

 Hossam Ali, CEO of Fatura, also commented saying "I feel incredibly proud of
what we have achieved at Fatura and I am super excited about the upcoming
chapter in our story. In just 2 years, and backed by a solid team of 500
believers, we have built a solid startup that has grown exponentially across
the whole nation and impacted over 60,000 merchants. We are honoured to be
setting the benchmark in the Egyptian startup ecosystem for M&A between
digital disruptors and industry leaders, and firmly believe that this
milestone will ignite a wave of more successful examples. Together with
Tanmeyah, we aim to fundamentally change how B2B works in Egypt, radically
facilitating the way trade, financing and payments are done. Through this
acquisition, Fatura will strongly benefit from Tanmeyah's broad client base
and solid financial position to unlock more opportunities."

 

Throughout its years of operation, Fatura has witnessed a significant increase
in its Gross Merchandise Value (GMV) and the number of active users,
particularly after the two successful rounds of fundraising from six different
venture capital funds and other prominent angel investors. Following the
acquisition, Tanmeyah will own 100% of Fatura Netherlands B.V and the founders
of Fatura will continue to manage the business as part of the Tanmeyah
management team while becoming shareholders in Tanmeyah. The shareholders of
Fatura will receive a combination of internally generated cash and existing
Tanmeyah treasury shares.

 

- ENDS -

 

About Tanmeyah for Microfinance Services

 

Tanmeyah for Microenterprise Services is a leading company in providing a
range of microfinance solutions in Egypt. Tanmeyah was established in 2009 and
since inception has achieved rapid growth to become one of the leading
entities in the field of working capital financing for owners of low-income
generating projects. The financing programs offered provide owners of
microenterprises with the necessary support to develop their businesses and
projects, which contributes to elevating the surrounding communities. Tanmeyah
facilitates access to finance in underprivileged areas through its branches
present in many governorates, and it always seeks to expand geographically by
opening new branches in rural and urban areas in Upper and Delta governorates.
Tanmeyah's financing programs range in value from EGP 1,000 to EGP 100,000,
which drive economic growth in Egypt and improve the standard of living for
citizens. The company continues to focus on growth and enhancing financial
inclusion in Egypt despite local and global challenges.

 

In 2016, EFG Hermes Holding acquired 94% of Tanmeyah, which later increased to
100% owned by EFG Hermes Holding in 2021, as part of its Non-Bank Financial
Institutions (NBFI) platform.

 

As of 1Q22, Tanmeyah has 304 branches spanning across 25 Egyptian
governorates. The Company boasts around 391,000 clients and a portfolio value
of EGP 3.9 billion.

 

About Fatura

 

Fatura is a fintech enabled B2B marketplace, connecting manufacturers,
distributors, and wholesalers with retailers in fragmented B2B industries.
Founded in December 2019, the start-up is on a mission to build the new norm
of B2B transactions. This is done through providing a suite of digital
solutions that connect retailers with a wider network of suppliers, enable
informed decision making through price transparency and data sharing and
empower retailers with instant working capital through the B2B Buy-Now,
Pay-Later solutions. In just 2 years, Fatura became the first digital player
in the sector to achieve presence in 22 governorates across Egypt. The
start-up currently serves over 60,000 retailers who order more than 10,000
unique products from more than 1000 suppliers through the platform. Fatura
currently operates in the FMCG and electrical supplies sectors, with future
plans to expand into new industries.

 

Note on Forward-Looking Statements

In this press release, EFG Hermes Holding may make forward looking statements,
including, for example, statements about management's expectations, strategic
objectives, growth opportunities and business prospects. These forward-looking
statements are not historical facts but instead represent only EFG Hermes
Holding's belief regarding future events, many of which, by their nature are
inherently uncertain and are beyond management's control and include among
others, financial market volatility; actions and initiatives taken by current
and potential competitors; general economic conditions and the effect of
current, pending, and future legislation, regulations, and regulatory actions.
Accordingly, the readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on which they are
made.

 

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