Source: Olumuyiwa Olowogboyega, Muktar Oladunmade/Techcabal

Moniepoint, a Nigerian business bank, and PayDay, a neobank, have denied reports of a planned acquisition. This comes after WeeTracker, an African tech publication, reported that Moniepoint is set to acquire PayDay for $40 million after leading its $3 million seed round. Moniepoint is a business bank that has the largest agency banking network in Nigeria and processed a total annualised payment value of $170 billion last year. PayDay is a neobank that connects Africans with the world at large with virtual dollar cards and other similar offerings. 

According to WeeTracker, Moniepoint and PayDay are in talks that will see Moniepoint acquire the neobank in about three months. The publication also claimed that the acquisition amount will assume a valuation of $40 million for the neobank. But some investors close to the deal have denied the reports, clarifying that Moniepoint only invested in the neobank.

Moniepoint also shared comments with TechCabal via email, stating that their investment in PayDay represented a “strategic investment” and not an acquisition. This was also echoed by PayDay representatives. 

Despite these denials, two other sources say that a deal is on the table and will likely still go ahead in three months. They claimed that an agreement in principle has been reached and that it will not be a surprise if the deal goes through as the acquisition supposedly makes sense for Moniepoint. According to TechCrunch, PayDay had earlier turned down a $15 million acquisition offer from an African unicorn.

While the Moniepoint acquisition allegations have been denied, it does make sense that Moniepoint would acquire PayDay. The neobank currently processes an average of 40,000 transactions daily and over $25 million monthly, numbers that make it a solid option for Africans looking to receive money from abroad. 

The customer base of PayDay and the volume of transactions it currently claims to process indicate that it has cornered a significant market share in the remittance market. With Moniepoint on track to achieve unicorn status, an acquisition of a promising startup like PayDay might help accelerate its journey toward achieving unicorn status. 

Source: Olumuyiwa Olowogboyega, Muktar Oladunmade/Techcabal