Nedbank acquires iKhokha for R1.65 billion to enhance support for South African SMEs"

Nedbank Group plans to acquire 100% of fintech innovator iKhokha in an all-cash deal of about R1.65 billion, a significant move in Nedbank’s strategy to deepen its support for small and medium-sized enterprises through digital innovation and inclusive financial services.

Founded in 2012, iKhokha has become a leading partner to many thousands of South African entrepreneurs, and shares the marke with competitors such as Yoco and Capitec Pay. The company, founded by Matt Putman, Ramsay Daly, and Clive Putman, provides card machines, digital payment solutions, and business tools to SMEs, processing north of R20 billion annually in digital payments and other services.

“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 Nedbank Group Managing Executive for Personal and Private Banking, Ciko Thomas.

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

Thomas said the acquisition represented “a pivotal moment” in their 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,” said Thomas.

“We believe that empowering entrepreneurs is essential to building a thriving and inclusive economy,” said Nedbank Group CEO Jason Quinn. He said iKhokha’s mission and technology aligned “perfectly” with the bank’s aim of digital transformation in the SME sector.

“Together, we will unlock new opportunities for growth and financial inclusion in South Africa and potentially abroad,” said Quinn.

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

These investors played a big role in supporting the management team in scaling iKhokha’s operations and product innovation. “Their exit reflects the strong performance and strategic value of the business and underscores their confidence in Nedbank’s ability to take iKhokha into its next phase of growth.”

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

Crossfin Holdings CEO Dean Sparrow said in a statement: “We are extremely proud of what has been achieved by the iKhokha team and the fact that we have found a great home for the business, its people, and the SME market it services.”

Apis Partners managing partners Matteo Stefanel and Udayan Goyal said they were “incredibly proud of how far iKhokha has come — from a promising fintech startup to one of South Africa’s leading payment providers. Our partnership with Matt and the team has been deeply rewarding, not only in terms of the company’s rapid growth but also its powerful impact on thousands of South African SMEs.”

They said they were confident iKhokha would continue to scale its aims of driving financial inclusion and empowering entrepreneurs, as it entered its next phase under the ownership of Nedbank.

CEO and co-founder of iKhokha, Matt Putman, said joining forces with Nedbank gave them the platform to scale their impact, further accelerate product innovation, and unlock new value for their merchants.

“There is great alignment across both leadership teams on the synergies that can be unlocked, and we believe our combined strengths will result in a truly differentiating and highly competitive value proposition for SMEs in the market. It also opens the door for us to explore expansion into other strategic markets on the continent,” Putman said.

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

Nedbank chairperson Daniel Mminele said in their latest annual report that they had embarked on a comprehensive strategy refresh last year to align with evolving market trends, client expectations, and competitive dynamics.

New initiatives identified in this process that aimed to make Nedbank compete more effectively in the medium-to-long term included leveraging investments in technology to drive revenue growth and productivity improvement, unlocking a large insurance cross-sell opportunity, portfolio diversification in areas such as East Africa, and the launch of a dedicated new offering to transform how mid-sized corporates access financial expertise and solutions.

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