Latin American financial solutions provider dLocal set to buy out Africa-centered financial service Aza Finance for approximately $150 million.
In a strategic move to expand its footprint in Africa, Latin American payments giant dLocal has announced the acquisition of AZA Finance, a cross-border payments platform focused on Africa, for an estimated $150 million. The deal, pending regulatory approval, marks dLocal's first major acquisition outside Latin America.
Aza Finance, founded in Nairobi, brings a strong presence across African markets, offering over-the-counter FX and stablecoin capabilities. This acquisition significantly enhances dLocal's stablecoin and crypto-related services, particularly in high-adoption markets like Nigeria, where 77% of crypto users have converted local currency to stablecoins.
A Strategic Play for Market Penetration
The strategic significance of this acquisition lies in securing a low-cost entry into Africa's $9 billion remittance market. AZA Finance's established fintech infrastructure and deep local market knowledge will enable dLocal to better serve African consumers and businesses, addressing critical pain points in remittances and forex services.
AZA Finance's niche focus on Africa aligns with dLocal's strategy of targeting the complex, fragmented ecosystems of emerging markets, particularly in the "Global South." This acquisition allows dLocal to deepen its localized payment and remittance solutions tailored to African needs.
Scalability and Margin Resilience
dLocal benefits from its scalable API payment platform and resilient margins, which support efficient onboarding of merchants and diversification of revenue streams. This resilience is evident in volatile markets like Nigeria, where dLocal maintains a gross margin of around 70%.
Enhancing Remittance and Forex Solutions
The acquisition improves dLocal's treasury operations and payouts, and enhances its remittance and forex solutions. AZA Finance brings focused strengths in remittances and forex operations, complementing dLocal’s existing payment infrastructure.
Integration and Future Prospects
dLocal will integrate AZA's team and tech, tapping into their 11 years of regional experience. Elizabeth Rossiello, AZA's founder, described the deal as merging "Africa's largest FX trading desk" with a "massive global platform."
Carlos Menendez, dLocal COO, stated, "We are well-positioned to offer innovative, efficient, and localised payment solutions." The acquisition comes less than five months after the companies began a partnership.
The deal significantly expands dLocal's footprint in Africa, one of the fastest-growing markets for digital payments and remittances. dLocal has been named one of the Americas' fastest-growing companies by the Financial Times, and this acquisition is a testament to its commitment to growth and innovation.
[1] dLocal Press Release, "dLocal Acquires AZA Finance to Expand in Africa," https://www.dlocal.com/blog/dlocal-acquires-aza-finance-to-expand-in-africa/
[3] AZA Finance Press Release, "AZA Finance and dLocal Partner to Expand Cross-Border Payments in Africa," https://www.aza.finance/press/aza-finance-and-dlocal-partner-to-expand-cross-border-payments-in-africa/
[5] PaymentsSource, "dLocal buys AZA Finance to expand in Africa," https://www.paymentsource.com/news/dlocal-buys-aza-finance-to-expand-in-africa
The strategic acquisition of AZA Finance strengthens dLocal's business expansion in Africa, as it aims to penetrate the $9 billion remittance market with a scalable API payment platform and resilient margins. This move also enhances dLocal's technology capabilities, particularly in stabilcoin and forex operations, due to AZA Finance's presence in African markets.
The integration of AZA Finance's team and technology into dLocal's existing payment infrastructure will further bolster dLocal's remittance and forex solutions, providing innovative, efficient, and localized payment solutions in African markets, where digital payments and remittances are experiencing rapid growth.
