Nedbank snaps up well-known South African fintech for R1.65 billion

Nedbank has entered into a binding agreement to acquire 100% of fintech iKhokha in an all-cash deal for approximately R1.65 billion. 

The transaction is subject to customary regulatory approvals and is expected to conclude in the coming months, and is part of Nedbank’s push into digital banking services. 

Founded in 2012, iKhokha has established itself as the leading trusted partner to South African entrepreneurs. It offers a suite of affordable, accessible SME cash advance, payment, and business management tools. 

The acquisition will see iKhokha become a wholly owned subsidiary of Nedbank, while continuing to operate under its own brand and leadership team.

“This acquisition is a natural evolution of our existing relationship with iKhokha, and we are incredibly excited to welcome iKhokha to our Nedbank family,” said Ciko Thomas, Group Managing Executive for Personal and Private Banking.

“The acquisition is a pivotal moment in our strategy to empower the SME  market. By combining their innovative technology with our deep banking experience, we will provide  small business clients with the best-in-class tools they need to thrive.”

Nedbank also hinted at expanding iKhokha’s offering outside of South Africa as it looks to East Africa and other Southern African nations for growth. 

The bank’s earnings are currently very closely tied to the performance of the South African economy, with its expansion into Africa being relatively limited compared to its peers. 

The transaction also marks a successful exit for iKhokha’s long-standing investors – Apis Partners,  Crossfin Holdings, and the International Finance Corporation (IFC). 

These investors played a pivotal role in supporting the management team in scaling iKhokha’s operations and product innovation. 

Crossfin has backed the iKhokha founders from the initial concept in early 2012 to become a uniquely positioned business with an attractive growth profile and much to offer the South African SME market. 

“This is a proud moment for both the founders and the broader iKhokha leadership team,” said Matt  Putman, CEO and co-founder of iKhokha. 

“Joining forces with Nedbank gives us the platform to scale our impact, further accelerate product innovation, and unlock new value for our merchants.”

“It also opens the door for us to explore expansion into other strategic markets on the continent. We remain committed to our mission of empowering  entrepreneurs and building tools that help small businesses thrive.” 

The acquisition includes a comprehensive management lock-in to ensure managerial continuity and alignment with long-term growth objectives.