South African banking leader Nedbank has announced the acquisition of Durban-based payments fintech iKhokha in an all-cash transaction worth $92.4 million. The deal represents a major development in the country’s fast-growing fintech sector. It also signals the increasing efforts by traditional banks to tap into the small and medium-sized enterprise (SME) market.
Strategic Significance
For Nedbank, the acquisition offers a direct pathway to acquiring advanced payment technology and a strong SME customer base. This move allows the bank to strengthen its foothold in a segment historically underserved by established financial institutions. For iKhokha, the deal brings the scale and resources of a large banking partner, enabling expansion opportunities beyond South Africa.
Leadership Perspective
Ciko Thomas, group managing executive for personal and private banking at Nedbank, described the acquisition as a pivotal step in their SME strategy. He emphasized that blending iKhokha’s innovative solutions with Nedbank’s banking expertise will deliver powerful tools to small businesses. The collaboration is aimed at enhancing operational efficiency and improving competitiveness for SME clients.
A Unique Founding Story
iKhokha’s rise is particularly notable because it defies the stereotype of tech startups being founded by developers. Co-founders Matt Putman and Ramsay Daly leveraged backgrounds in marketing, digital communications, and product development to build the business. Their vision was anchored in understanding customer needs and delivering practical payment solutions for merchants.
Founders’ Backgrounds
Before starting iKhokha in 2012, Matt Putman held senior marketing and technology roles in both the UK and South Africa. Co-founder Ramsay Daly specialized in digital marketing and product development, bringing expertise in product strategy and market execution. Their complementary skills allowed the company to craft mobile point-of-sale (mPOS) solutions that combine card machines with an easy-to-use mobile app for small business owners.
Driving the Cash-to-Digital Transition
Since its inception, iKhokha has been at the forefront of South Africa’s shift from cash to digital payments, particularly in informal and SME sectors. Its accessible mPOS tools empower merchants to accept digital payments and manage their operations more efficiently. The company’s approach has contributed significantly to financial inclusion in underserved markets.
Investor Exit and Industry Impact
The deal marks a successful exit for investors such as Apis Partners, Crossfin Holdings, and the International Finance Corporation (IFC). Crossfin Holdings, which supported iKhokha from its early days, expressed pride in the company’s achievements and the strategic fit with Nedbank. Dean Sparrow, CEO of Crossfin, noted that the acquisition secures a strong future for the business, its employees, and its SME clientele.
Path to Growth and Market Expansion
Integrating iKhokha’s technology into Nedbank’s ecosystem will be an immediate priority following regulatory approval. CEO Matt Putman emphasized the alignment between both leadership teams in identifying synergies that will enhance value for SMEs. While the company’s operations have so far been limited to South Africa, the partnership may open opportunities in other African markets.
Regulatory and Closing Timeline
The acquisition remains subject to regulatory clearance, with finalization expected in the coming months. Both parties are confident the deal will proceed smoothly, given the complementary strengths and market positioning. Once completed, the integration is expected to set a new standard in SME-focused financial services.
Nedbank’s acquisition of iKhokha is a landmark transaction in South Africa’s fintech sector, combining the agility of a startup with the stability of a major bank. For SMEs, the merger promises better access to digital payment solutions and banking services tailored to their needs. As the companies move toward integration, the deal has the potential to reshape how small businesses transact and grow in the region.