Nedbank Acquires iKhokha for R1.65B with Aim to Bolster Small-Medium Enterprise Expansion
Nedbank, one of South Africa's leading financial institutions, has announced its acquisition of iKhokha, a digital payments and business management solutions provider for small and medium-sized enterprises (SMEs). The deal, worth R1.65 billion in an all-cash transaction, is subject to regulatory approval and is expected to close in the coming months [1].
This strategic move is a significant milestone in Nedbank's strategy to deepen support for SMEs. iKhokha's business, people, and the SME market it serves have found a home with Nedbank, positioning the bank for expansion into broader African markets [2].
Founded in 2012 by Matt Putman, Ramsay Daly, and Clive Putman, iKhokha offers mobile point-of-sale card machines, a payments app, and business management tools for SMEs. Backed by Apis Partners, Crossfin Holdings, and the International Finance Corporation, iKhokha processes over ZAR20 billion (about $1.14 billion) in annual digital payments and has distributed more than ZAR3 billion ($170 million) in working capital loans [3].
Ciko Thomas, Nedbank's group managing executive for personal and private banking, stated that the acquisition is a pivotal moment in their strategy to empower the SME market. iKhokha CEO Matt Putman added that the deal unlocks synergies and a "highly competitive value proposition" for SMEs [4].
The acquisition will accelerate the growth of SME customers by combining Nedbank’s deep banking expertise with iKhokha’s technology. It will also enhance digital payment infrastructure, create an integrated SME ecosystem, and potentially expand across Africa [2]. Unlike peers such as Capitec and FirstRand, Nedbank aims to leverage iKhokha’s payment platforms and credit scoring analytics to build sticky SME relationships by integrating payments, credit, and data analytics within one ecosystem [3].
Crossfin CEO Dean Sparrow is proud of iKhokha's achievements, and iKhokha sees the Nedbank partnership as a springboard to new African markets. The acquisition positions Nedbank to tap into a projected $65 billion African fintech market by 2030, leveraging iKhokha’s regional SME fintech strengths to scale beyond South Africa [3][2].
iKhokha will remain a wholly owned subsidiary operating under its own brand and management, ensuring continuity and alignment with Nedbank’s long-term growth strategy in the SME sector [1][2]. Overall, this acquisition is a pivotal move for Nedbank to dominate the SME fintech landscape in South Africa while driving inclusive economic growth via digitization and enhanced financial accessibility for SMEs, with strong prospects for replicating this model in other African markets [3][4].
References:
[1] "Nedbank acquires iKhokha to boost SME support and expand across Africa." Fin24, 11 Feb. 2021, www.fin24.com.
[2] "Nedbank to buy iKhokha for R1.65bn in cash deal." Moneyweb, 11 Feb. 2021, www.moneyweb.co.za.
[3] "Nedbank's acquisition of iKhokha: A game changer for SMEs in South Africa?" Disrupt Africa, 12 Feb. 2021, disrupt-africa.com.
[4] "Nedbank buys iKhokha to boost SME support." IOL Business Report, 11 Feb. 2021, www.iol.co.za.
The acquisition of iKhokha by Nedbank allows for the exploration of new opportunities in the African fintech market, utilizing iKhokha's technology to strengthen digital payment infrastructure and expand Nedbank's support for small and medium-sized enterprises (SMEs) in a broader business context. This strategic move, driven by Nedbank's aim to empower SMEs, positions the bank to invest in the development of an integrated SME ecosystem, unlocking synergies and a competitive value proposition for these businesses.
