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Nedbank completes $93.3 million cash purchase of ikhokha in transaction deal

Financial institution Nedbank purchases payment technology firm iKhokha for 1.65 billion Rand (equivalent to 93.3 million US dollars) through a transaction involving only cash.

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Nedbank completes $93.3 million purchase of ikhokha in an all-cash transaction
Nedbank completes $93.3 million purchase of ikhokha in an all-cash transaction

Nedbank completes $93.3 million cash purchase of ikhokha in transaction deal

Nedbank Acquires Fintech Company iKhokha to Boost Digital Services for Small Businesses in South Africa

Traditional bank Nedbank's acquisition of fintech company iKhokha is set to significantly enhance financial inclusion and digital services for small and medium-sized enterprises (SMEs) in South Africa. The partnership aims to empower SMEs with affordable and accessible financial tools that promote entrepreneurship and business growth.

With Nedbank's extensive banking capabilities combined with iKhokha's innovative digital payment and business management solutions, the acquisition will broaden access and scale these offerings to more entrepreneurs across the country.

Improved digital financial services tailored for SMEs are at the forefront of the deal. iKhokha specializes in card machines, digital payment systems, and working capital advances, having processed over ZAR20 billion in payments annually while distributing more than ZAR3 billion in working capital to SMEs.

The acquisition also strengthens financial inclusion, as Nedbank emphasizes that the deal aligns with its vision for an inclusive economy by specifically addressing the financing and operational needs of underserved small businesses, which are pivotal to economic growth and employment.

iKhokha will continue to operate under its own brand and leadership as a wholly owned subsidiary, ensuring continuity and preserving its entrepreneurial culture. This move will allow the fintech company to benefit from Nedbank's resources and reach to accelerate growth and innovation.

The deal fits within Nedbank's larger IT investment plans, supporting its commitment to digital transformation focused on SMEs, a segment that has traditionally faced obstacles in accessing finance and modern digital banking solutions.

Matt Putman, CEO and co-founder of iKhokha, sees the acquisition as a platform to scale innovation and deliver greater value to merchants. Ciko Thomas, Group Managing Executive for Personal and Private Banking at Nedbank, described the acquisition as a "pivotal moment" in Nedbank's SME initiatives.

The acquisition of iKhokha by Nedbank underscores a broader trend of traditional banks increasingly turning to fintech to stay competitive. The deal represents a successful exit for iKhokha's long-term backers, including Apis Partners, Crossfin Holdings, and the International Finance Corporation.

The transaction is subject to regulatory approvals and is expected to close in the coming months. The acquisition highlights the growing importance of fintech in the South African financial landscape.

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