The management of Nigeria’s ecommerce giant Konga has denied a widespread rumor that it could soon be acquired by integrated digital payments company Interswitch.
TechCity exclusively gathered that the Chief Executive Officer of the company, Sola Adekoya, told staff of the company that the news of the company acquisition is untrue.
According to the refuted report, Interswitch is in talks to acquire Konga. Quoting unnamed sources, PageOne reported that the acquisition deal has reached an advanced stage with Naspers and Kinnevik AB, the two major investors in Konga.
The acquisition denial is coming as a great relief to the country’s tech ecosystem which is still groping with the takeover of one of its major telecoms companies, Etisalat Nigeria, by banks following its inability to repay a multibillion naira syndicated loan it is owing about 13 local banks.
According to the report, by acquiring Konga, Interswitch will be able to achieve portfolio diversification, going beyond its current payment processing space where it is a dominant player.
Wole Ogunlade (Digital Business Transformation Expert) and Head of Digital Strategy at VoguePay.com told PageOne:
“One thing is clear, the leadership at Interswitch are poised to remain relevant by using digital transformation initiatives to improve their competitive edge even, as its market is being disrupted by new players and global competitions”.
“If you look at this development in that light, one can easily see that Interswitch’s acquisition of Konga is strategic as it will allow it to diversify in the wake of competitions to its vertical business i.e payment. Right now eCommerce is arguably a good niche as it is a major driver of online payment in Nigeria. This means that Interswitch can eat a piece of the pie to increase its volume of transaction flow”.
“This proposed acquisition will be part of a grand move by Interswitch to control the entire payment and lifestyle value chain in Africa when you understand that Interswitch is putting its hand in several verticals including “buying” a bank in East Africa, and its other strategic global partnership ambitions”.