ValU, the Egyptian financial technology platform renowned for its widely used “Buy Now, Pay Later” (BNPL) service, is poised to become a publicly traded company on the Egyptian Exchange (EGX). This development follows the announcement from its parent company, EFG Hermes Holding, which revealed that the board has approved the listing. In a statement made to the Egyptian stock exchange, the company also outlined plans to distribute a portion of EFG Hermes’ profits to its shareholders in the form of ValU shares. This strategic move is intended to facilitate active trading of the fintech firm’s stock once it is listed.
The board’s approval represents a significant milestone in ValU’s growth trajectory, granting the company the green light to initiate the formal listing procedures. This process will involve completing registration with the Egyptian Financial Regulatory Authority (FRA) and obtaining approval for a disclosure report that will provide potential investors with crucial information regarding the company’s financial health and operational framework prior to the commencement of trading.
ValU’s upcoming initial public offering (IPO) follows the recent acquisition of a FinTech license from the FRA, a regulatory endorsement that highlights the company’s commitment to driving innovation within Egypt’s rapidly evolving digital finance landscape. This license enables ValU to offer a range of enhanced digital services, including seamless electronic verification for users, legally binding digital contracts, and secure digital record-keeping. According to ValU, these technological advancements are aimed at revolutionizing the customer experience, making financial services more accessible, efficient, and secure for individuals and businesses throughout Egypt. The FRA license also serves as a validation of ValU’s business model and its compliance with regulatory standards in the burgeoning fintech sector.
Since its inception, ValU has emerged as a transformative force in Egypt’s financial services landscape, gaining substantial traction with its BNPL platform that allows millions of consumers to make purchases and pay for them in installments. In addition to its core offering, ValU has diversified its services to include investment products such as the AZ Valu Cash Fund and EFG Hermes ONE, positioning itself as a comprehensive financial solutions provider. The company has also rolled out a variety of innovative programs tailored to the local market, including “Shaqlabaz,” which offers instant cashback rewards, the “Akeed” savings product, and “Ulter,” designed for financing luxury goods purchases.
In a recent strategic initiative aimed at expanding its reach and enhancing customer convenience, ValU has partnered with Visa to introduce the Titanium credit card. This collaboration provides exclusive benefits to ValU’s growing user base, further integrating its services with traditional financial instruments.
ValU has also been actively involved in Egypt’s debt markets to secure funding for its expansion efforts. Notably, in December of the previous year, the company successfully raised $10 million (EGP 519.2 million) through its latest securitization of consumer finance receivables. This transaction was part of a broader EGP 16 billion ($312 million) securitization program, underscoring ValU’s proactive approach to enhancing its liquidity and funding its growth initiatives. Securitization, a common financial practice, involves pooling loans or receivables and selling them as securities to investors, enabling the originating company to raise capital.
Mai Hamdy, Executive Director of Debt Capital Markets at EFG Hermes, emphasized the importance of ValU’s recent securitization efforts, noting that they reflect a strong partnership between the two entities and highlight EFG Hermes’ commitment to promoting financial inclusion, innovation, and economic growth in the region. EFG Hermes played a pivotal role in this transaction, serving as the sole financial advisor, issue manager, general arranger, issue promoter, and sole underwriter. The involvement of other financial institutions, such as Arab Banking Corporation (ABC), in the subscription process further illustrates the market’s confidence in ValU’s financial stability and future prospects.
While the specific timing and valuation of the IPO are yet to be determined, the board’s approval from EFG Hermes marks a crucial turning point for ValU and signals a potential shift in Egypt’s fintech landscape. The listing of a prominent player like ValU on the EGX could attract increased investment into the sector and inspire other successful fintech startups to pursue similar paths, potentially enriching Egypt’s capital markets and fostering greater innovation in financial services. The plan to distribute ValU shares to EFG Hermes’ existing shareholders is also a noteworthy aspect of this strategy, likely generating significant initial interest and creating a broad base of investors for the newly listed stock. As ValU approaches its public market debut, the financial community will be closely monitoring its performance and the broader implications for the future of fintech in Egypt and the wider region.
