According to people familiar with the matter, Zapper is raising funds that could value the South African start-up close to $1 billion. Ernst & Young has been hired as advisors to manage the potential deal. The Cape Town-based mobile payments business may also consider a combination with a strategic bidder, the people said, asking to remain anonymous as the information is still private.
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“Management is excited by future opportunities, underpinned by an innovative technology road map,” a Zapper spokesman said in response to questions about a potential deal. Interested parties place “us in excellent standing for ongoing and future discussions”, the person said, declining to comment further.
Zapper was started in 2014, and currently operates its mobile payments platform with about 250,000 monthly customers and 65,000 merchants. Its main solution enables easy, quick payments using QR codes and URL technology and the use of data insights to award discounts.
Start-ups in Africa have had a bumper 24 months, raising more than $5 billion in just the last year. Investors are backing companies that are trying to fix the continent’s thorniest problems, such as insufficient banking infrastructure. Fintech companies have expanded rapidly over the past few years, with several attaining “unicorn” status with valuations of more than $1-billion.
In 2018, Zapper launched Mastercard’s digital payment service, Masterpass, at over 20,000 of its merchants across the country. In 2020, China-based technology giant Huawei struck a partnership with Zapper to introduce its mobile payment service ‘Huawei Pay’ in South Africa.
