South African banking giant Nedbank has announced its acquisition of Durban-based payments fintech iKhokha in an all-cash deal valued at R1.65bn ($92.4m). The move marks a significant consolidation in the country’s burgeoning fintech landscape and underscores a strategic pivot by traditional banks to capture the small and medium-sized enterprise (SME) market.
The acquisition provides a successful exit for iKhokha’s venture capital and private equity backers, including Apis Partners, Crossfin Holdings, and the International Finance Corporation (IFC).
Why it matters
The deal is a strategic play for both parties. For Nedbank, it’s a fast-track ticket to acquiring the technology and customer base of a nimble player in the SME sector, a market that has historically been underserved by incumbent banks.
For iKhokha, founded in 2012, the acquisition offers the scale and balance sheet of a major financial institution, paving the way for potential expansion beyond its home market.
“The acquisition is a pivotal moment in our strategy to empower the SME market,” said Ciko Thomas, group managing executive for personal and private banking at Nedbank. “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.”
A win for non-technical founders
iKhokha’s success story is notable as it challenges the archetype of the developer-led tech startup. Co-founders Matt Putman and Ramsay Daly built the company not on a foundation of coding expertise, but on strong backgrounds in marketing, digital communications, and product development.
- Matt Putman (CEO): Prior to co-founding iKhokha, Putman held senior marketing and technology roles in the UK and South Africa.
- Ramsay Daly (Co-founder): Daly’s background is in digital marketing and product development.
Their success demonstrates that deep market understanding, product strategy, and go-to-market execution can be just as crucial as technical prowess in building a valuable technology company. The founders focused on creating accessible mobile point-of-sale (mPOS) solutions — card machines and a mobile app — that allow small merchants to accept digital payments and manage their business operations.
The backstory and the exit
Since its inception, iKhokha has been a key player in driving the transition from cash to digital payments within South Africa’s informal and SME sectors. Long-term investor Crossfin Holdings, which backed the company from its earliest days, praised the outcome.
“We are extremely proud of what has been achieved by the iKhokha team to date and the fact that we have found a great home for the business, its people and the SME market it services,” said Dean Sparrow, CEO of Crossfin.
The transaction represents a full-circle moment for a venture that attracted significant growth capital to scale its operations and compete with other payments players in the region.
What’s next?
The immediate focus will be on integrating iKhokha’s offerings into Nedbank’s ecosystem. In a statement, iKhokha CEO Matt Putman highlighted the strategic alignment between the two companies.
“There is great alignment across both leadership teams on the synergies that can be unlocked through this transaction, and we believe our combined strengths will result in a truly differentiating and highly competitive value proposition for SMEs,” Putman said.
While iKhokha’s operations have been confined to South Africa, Putman noted that the partnership with Nedbank “opens the door to the exploration of other markets on the continent.”
The transaction is currently subject to regulatory approvals and is expected to be finalised in the coming months.