FINTECH IN AFRICA:HELPING YOU REALISE THE OPPORTUNITIES

“Clifford Chance really understand the African continent. They have the experience needed to actually have a feel for it – I would rate them top for sure.”Africa-wide, Chambers Global 2016

“Their knowledge of Africa is one of the best in the market.”Africa-wide, Chambers Global 2016

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KEY FOCUS AREAS

1 Fintech and regulation: navigating unchartered waters

Fintech creates tension between the existing financial regulatory environment and the challenges to that framework brought about by new technologies. In nearly all African jurisdictions, the regulatory framework for fintech products and services is either completely absent or in the early stages of development. The regulatory landscape is further complicated by the absence of a uniform pan-African regulatory framework for financial services. How can regulatory and operational risk be mitigated against this uncertain backdrop? Conversely, how can businesses leverage the existing framework to enhance value? What regulatory changes can be anticipated and factored into the business model upfront?

2 M&A: securing the best deal terms in a challenging environment

Fintech is spurring a wide range of M&A activity as established financial institutions and corporates jump-start technological transformation by either acquiring or collaborating with emerging fintech companies. Successful fintech M&A requires an understanding of the unique challenges which are likely to arise in fintech transactions. For example, how are valuation differences bridged? In a joint venture, how do you create alignment whilst securing downside protection? These issues can be particularly challenging to resolve in less mature M&A markets.

3 Intellectual Property (IP): maximising value

Developing and implementing a robust IP portfolio management strategy is critical for any company in the fintech space and is also a key value driver in fintech M&A deals. In Africa, protection for IP and the practical, effective means to enforce IP rights varies from one jurisdiction to another. This poses challenges, particularly for pan-African businesses: how can they exploit their IP fully across several countries whilst mitigating infringement risk in countries with less effective IP enforcement regimes? IP localisation, export control regimes and compulsory technology transfer policies are also emerging in some key African countries - businesses will need to devise innovative structures to address these requirements while ensuring they remain free to exploit key IP rights in other countries. Securing favourable terms in IP exploitation contracts will also require a robust negotiation strategy, especially when dealing with counterparties with greater perceived market power.

4 Data protection: A growing threat or a value enhancing opportunity?

It is estimated that Africa suffers 10% of global cybercrime. This is significant for a continent which accounts for only 2% of the global gross domestic product. Cybersecurity and data protection issues therefore present significant risks for African fintech businesses. However, in a regulatory landscape that is not fully and clearly defined, they also present interesting value-enhancing opportunities, particularly around big data and data-driven technologies. How do you leverage these opportunities whilst mitigating operational and compliance risk? Regulatory developments outside Africa may also have an impact – the recently enacted EU General Data Protection Regulation asserts extraterritorial effect and could affect companies collecting or processing data concerning EU citizens.

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OUR FINTECH EXPERIENCE IN AFRICA

• Advising Kenyan telecoms operator Safaricom on its next generation M-Pesa mobile payment solution, including advice on intellectual property protection and ownership, development and exploitation contracts.

• Advising the Mara Group, a leading pan-African conglomerate, on its joint venture with Wellington Management Company and Mozido Inc. to launch Africa’s first mobile messaging and payment platform. Operating under the name Mara Online, the company offers instant messaging, content and mobile payments to millions of people.

• Advising the Commonwealth Bank of Australia on its purchase of Tyme Investments, a leading South Africa mobile payments provider, and associated intellectual property, in connection with the establishment of a global digital retail banking platform.

• Advising Emerging Markets Payments Holdings, an Actis portfolio company, on the acquisition of South Africa-based ACET Processing, the leading provider of payments solutions for retailers and consumer finance companies in Southern Africa.

• Advising a peer-to-peer platform start-up on the regulatory frameworks applicable to platforms and considerations for documentation structure.

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OUR GLOBAL FINTECH EXPERIENCE

US• Advising WEX, the global payments business, on an

infrastructure “lift-out” outsourcing to CSC, which covers multiple jurisdictions globally

• Advising multiple clients on marketplace lending transactions including the acquisition of consumer loans from most major platforms; securitisation of consumer and SME loans; credit facilities with leading bank syndicates; warehouse facilities with investment banks; and private and public debt and equity transactions.

Europe• Advising Banco Santander on its joint venture agreement to

launch a fintech venture builder with Monitise plc, aimed at investing in fintech businesses

• Advising BBVA on the subscription for a 29.5% stake valued at £45 million in Atom Bank, the UK’s first digital-only lender.

Asia• Advising Barclays, BNP Paribas, Goldman Sachs, HSBC, JP

Morgan and Société Générale on the establishment of Contineo Limited, the first open multi-issuer platform for structured products serving private banking and wealth management clients

• Advising a start-up on unique settlement and payment systems for commodity-linked storage receipts and digital currency.

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• A world-leading finance practice. Our integrated team of finance lawyers is one of the world’s foremost legal advisers to the financial sector. We act on the financial markets’ most ground-breaking deals and are trusted advisers to both corporations and financial institutions. Our in-depth knowledge of the regulatory landscape, coupled with our strong relationships with regulators, means that we are uniquely placed to support your fintech initiatives.

• A dedicated technology practice. Our technology lawyers closely follow the latest trends and transformations in fintech and beyond. We understand the commercial impact of new technologies, and regularly advise businesses on strategic transformations. In addition, our M&A technology specialists have extensive experience in the fast-moving ecosystem of high-growth technology companies and venture capital.

• Unparalleled Africa M&A experience: Having advised on over 100 M&A transactions spanning 25 African countries during the past 18 months, Clifford Chance’s Africa M&A corporate team is ideally suited to help you secure the best deal terms on fintech- driven transactions.

• Local law and knowledge: Our regional teams maintain close relationships with the best African law firms. We work together and meet on a regular basis to nurture and deepen those relationships. Our relationships with local counsel across the continent permits us to provide clients with the opportunity to choose the best local African legal adviser for each matter, and we can coordinate and serve as a single point of contact.

LEADING THE WAY IN AFRICA FINTECH

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CONTACTS

Peter ChapmanSenior Associate, Financial RegulatoryT: +44 20 7006 1896E: peter.chapman@

cliffordchance.com

Edmund BoyoPartner, Anglophone West Africa practiceT: +971 4503 2614E: edmund.boyo@

cliffordchance.com

Mohamed Hamra-KrouhaPartner, Arabophone North Africa practiceT: +971 2613 2370E: mohamed.hamra-krouha@

cliffordchance.com

Andre DuminyPartner, TechnologyT: +44 20 7006 8121E: andre.duminy@

cliffordchance.com

Jeremy ConnickPartner, Southern Africa practiceT: +44 20 7006 4237E: jeremy.connick@

cliffordchance.com

Nicholas HughesPartner, East Africa practiceT: +44 20 7006 4621E: nicholas.hughes@

cliffordchance.com

Jonathan KewleyPartner, TechnologyT: +44 20 7006 3629E: jonathan.kewley@

cliffordchance.com

Franck CoudertPartner, Francophone North Africa practiceT: +212 52264 4308E: franck.coudert@

cliffordchance.com

Jennifer MbalutoSenior Associate, East Africa PracticeT: +44 20 7006 2932E: jennifer.mbaluto@

cliffordchance.com

Olamide OladosuDirector, Africa GroupT: +44 20 7006 2016E: olamide.oladosu@

cliffordchance.com

Laura NixonSenior Associate, FinanceT: +44 20 7006 8385E: laura.nixon@

cliffordchance.com

Titus EdjuaDirector, Africa GroupT: +44 20 7006 3052E: titus.edjua@

cliffordchance.com

Jason MendensPartner, Arabophone North Africa practiceT: +971 4503 2616E: jason.mendens@

cliffordchance.com

Anthony GiustiniRegional Managing Partner for AfricaT: +33 14405 5926E: anthony.giustini@

cliffordchance.com

Mustapha MourahibManaging Partner, Casablanca, Francophone North Africa practiceT: +212 52264 4310E: mustapha.mourahib@

cliffordchance.com

Your fintech contacts:

Your Africa contacts:

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