Nedbank to acquire SME fintech iKhokha for around $94m

Nedbank plans to utilise its new acquisition to expand its service remit for SMEs in South Africa.

Nedbank, one of South Africa's largest banks with total assets of ZAR 1.4 trillion, is set to acquire Durban-based fintech iKhokha, which specialises in payment and business management tools for small and medium-sized enterprises (SMEs), in a deal valued at ZAR 1.65 billion (approximately $93.9 million).

The all-cash transaction remains subject to regulatory approval and is expected to close "in the coming months", according to a Nedbank statement. Once finalised, iKhokha will become a wholly-owned subsidiary of Nedbank. The bank adds that the agreement contains a "comprehensive management lock-in", which will see the fintech continue operating under its own brand and leadership team.

The deal will see long-standing investors Apis Partners, International Finance Corporation, and Crossfin Holdings, which has supported iKhokha since its inception by Ramsay Daly, Clive Putman, and CEO Matt Putman in 2012, exit their interests in the business.

iKhokha brings to Nedbank a suite of point-of-sale (POS) solutions, online payment and accounting tools, and cash advance products. The fintech currently processes in excess of ZAR 20 billion annually, and has distributed more than ZAR 3 billion in SME working capital to date.

Nedbank says it will use the iKhokha purchase to "deepen its support for SMEs through digital innovation and inclusive financial services", with CEO Jason Quinn adding that this could potentially lead to an expansion into international markets.