Nedbank completes $93.3 million purchase of ikhokha in a cash transaction
Nedbank, a leading South African bank, has announced its acquisition of iKhokha, a prominent fintech company specialising in mobile point-of-sale (mPOS) services for small businesses and informal traders. The deal, worth R1.65 billion (USD 93.3 million), is subject to regulatory approvals and is expected to close in the coming months.
The acquisition reflects a global trend where traditional banks are absorbing fintechs to boost their digital presence, particularly in serving small businesses and improving mobile payment solutions tailored to local market needs. This move is part of Nedbank's strategy to digitally empower entrepreneurs and remain relevant in an era of digital-first banking.
iKhokha, a leading South African fintech, has distributed over R3 billion (USD 169.7 million) in working capital to Small and Medium Enterprises (SMEs) and processes over R20 billion (USD 1.1 billion) in annual digital payments. The acquisition aims to leverage iKhokha's technology and client base to accelerate digital adoption and financial inclusion in South Africa.
Ciko Thomas, Group Managing Executive for Personal and Private Banking at Nedbank, described the acquisition as a "pivotal moment" in Nedbank's SME initiatives. Matt Putman, CEO and co-founder of iKhokha, sees the acquisition as a platform to scale innovation and deliver greater value to merchants.
The deal advances Nedbank's digital capabilities and serves as a testament to how legacy institutions can accelerate innovation by integrating tech-driven enterprises. iKhokha will maintain its brand and leadership under a management lock-in, ensuring continuity in its services and innovation.
The acquisition underscores a broader trend of traditional banks turning to fintech to stay competitive. Globally and regionally, fintech acquisitions are driven by the need to create seamless, integrated digital financial services, the rising investment and valuation in digital assets, stablecoins, and payment infrastructure, and the desire to compete effectively against nimble fintech startups.
This acquisition marks a pivotal step toward deepening financial inclusion in South Africa. By integrating iKhokha's technology with its extensive financial services, Nedbank aims to provide iKhokha's technology with the resources and reach to scale its impact, deepening digital services for small businesses across South Africa.
The acquisition represents a successful exit for iKhokha's long-term backers, including Apis Partners, Crossfin Holdings, and the International Finance Corporation. These backers have been instrumental in iKhokha's growth, providing the necessary capital and strategic guidance to help iKhokha become a leading fintech player in South Africa.
In sum, the acquisition of iKhokha by Nedbank exemplifies the shift in South Africa mirroring global fintech-bank M&A trends: combining traditional banking strengths with fintech innovation to meet digitally evolving customer demands and expand financial inclusion with mobile-first, SME-focused digital solutions. This move strengthens Nedbank’s position in the competitive digital banking landscape both locally and continentally. The acquisition highlights the growing importance of fintech in the South African financial landscape, underscoring the potential for further fintech-bank collaborations in the future.
The acquisition of iKhokha by Nedbank signifies a significant step in merging traditional banking strengths with fintech innovation, aiming to meet evolving digital customer demands and expand financial inclusion with mobile-first, SME-focused digital solutions. This move also highlights the increasing importance of technology in the South African financial landscape, potentially paving the way for more fintech-bank collaborations in the future.
The integration of iKhokha's technology with Nedbank's extensive financial services will assist in scaling iKhokha's impact, improving digital services for small businesses across South Africa, and leveraging technology to stay competitive in the digital banking era.
