iKhokha, the South African fintech company, will continue normal operations following its acquisition by Nedbank for $93 million, according to the CEO's statement.
Nedbank, a leading South African bank, has announced its acquisition of iKhokha, a thirteen-year-old fintech startup based in Durban. The deal, worth approximately R1.65 billion (over $93 million), aims to give small businesses better tools, financial inclusion, and extend Nedbank's reach.
For years, access to credit has been a major challenge for small businesses in Africa, with only 20%-30% of these businesses having access to formal credit. iKhokha, with its focus on serving South Africa's small and medium-sized enterprises (SMEs), has been a valuable partner in addressing this issue. The acquisition provides access to markets that iKhokha could not have entered alone.
iKhokha has a history of partnering with Nedbank for payment processing and transactional banking. This partnership will now deepen, with iKhokha continuing to operate under its name, led by the same executive team. The acquisition is part of Nedbank's strategy to strengthen its digital offering and SME banking edge.
Nedbank brings significant distribution heft to the partnership, including over 4,100 ATMs, 400 branches, and more than 110,000 point-of-sale devices. With Nedbank's balance sheet of total assets of R1.4 trillion, iKhokha could evolve from a payments partner into a full financial services platform for SMEs.
Matthew Putman, co-founder of iKhokha, stated that the business will continue to run as normal, with its brand, staff, and independence remaining intact. He emphasised that the focus of the acquisition is more on expanding services rather than changing existing ones.
The acquisition is a signal to the wider fintech ecosystem, as consolidation is accelerating due to rising fintech competition, digital demand, inclusion pressures, shifting regulations, and the threat of global tech entrants. Beyond South Africa, Nedbank is ramping up investment across the Southern African Development Community and East Africa. The deal requires standard regulatory approvals, but in the meantime, iKhokha continues to serve SMEs, now with the backing of Nedbank.
The acquisition marks a strategic move for iKhokha to use Nedbank's work in other markets across Southern Africa, East Africa, and take iKhokha's model to SMEs across the continent. In January, Stitch, a digital payment fintech, acquired ExiPay and later acquired Efficacy Payments in July to expand its payments offering. This trend of consolidation in the fintech industry is expected to continue.
Nedbank serves 7.6 million clients in South Africa, with 3.2 million retail clients on its Money App, where digital transactions increased by 15% in June. The acquisition is part of Nedbank's efforts to enhance financial inclusion for small businesses and provide easier, more accessible payment services through its platform. The collaboration between iKhokha and Nedbank shares a vision of convergence in banking and payments that creates new opportunities.
Pricing and product shifts are still off the table until after regulatory approvals are completed. Nevertheless, the acquisition is a significant step forward in the digital transformation of banking in Africa, particularly for SMEs.
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