Amazon acquires stake in valU worth US$10Mexpands in Egypt

EGYPT – American multinational technology company, Amazon has expanded into the Egyptian market with the acquisition of US$10 million stake in valU.

Based on the terms and conditions of the transaction agreement, the option will be exercisable prior to or upon the occurrence of a qualified liquidity event at the level of valU.

It will be in the form of an independent investment involving third-party investors, a sale, an initial public offering, or another listing event.

As part of the deal, valU will offer the payment method on amazon.eg to eligible customers, who will gain the option to divide their costs into multiple payments.

The deal gives Amazon the option to replace that investment into valU at a later date, which comes out to a stake of 4.255% of the issued share capital of valU.

valU, a wholly-owned subsidiary of EFG Hermes Holding, is a leading BNPL provider in the Middle East and North Africa (MENA) region.

EFG Hermes has a current footprint spanning 13 countries across four continents. It has grown over 38 years from a pure-play investment bank in MENA into an impact-driven universal bank in Egypt

Drawing on its proven track record and a diverse team of talented employees, EFG provides a wide spectrum of financial services that include advisory, asset management, securities brokerage, research, and private equity to the entire FEM region.

Last year, valU formed a partnership with the online marketplace Jumia that links the company and the JumiaPay service, giving clients nine months of interest-free installments when shopping on the Jumia platform.

As reported last year, Egypt has taken part in the global BNPL boom as inflation there puts a strain on consumer finances.

There is a huge opportunity for buy now, pay later here in Egypt, given its very populous market.

It’s a consumer purchase-driven market where there is a lot of accessibility to consumer products and services, online or offline.

Shoppers who have store cards use them for 87% of all eligible purchases but this doesn’t mean retailers should boot buy now, pay later (BNPL) options from checkout.

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