TheNedbank Group, yesterday announced that it has entered into a binding agreement to acquire 100% of fintech innovatoriKhokha for a cash consideration of approximately R1.65 billion, marking a strategic move to bolster its digital offering and expand its presence in the small and medium-sized enterprise (SME) market. The deal, which remains subject to regulatory approvals, is expected to be finalised in the coming months.
Once the acquisition is completed, iKhokha will become a wholly owned subsidiary of Nedbank, while continuing to operate under its own brand and leadership team. A management lock-in has been structured into the transaction to ensure leadership continuity and alignment with Nedbank’s long-term growth objectives.
Nedbank Strengthens SME Banking Through Acquisition
The acquisition signals a major advancement in Nedbank’s digital transformation strategy, specifically within the SME sector. It’s also a reflection of a growing trend among traditional banks seeking to integrate or acquire fintech platforms to better serve the needs of SMEs.
Jason Quinn, Chief Executive of Nedbank Group noted:
“We believe that empowering entrepreneurs is essential to building a thriving and inclusive economy. iKhokha’s mission and technology align perfectly with our vision for digital transformation in the SME sector. Together, we will unlock new opportunities for growth and financial inclusion in South Africa and potentially abroad.”
Ciko Thomas, Group Managing Executive for Personal and Private Banking at Nedbank, echoed this sentiment, noting:
“This acquisition is a natural evolution of our existing relationship with iKhokha, and we are incredibly excited to welcome iKhokha to our Nedbank family.”
What is iKhokha?
Founded in 2012, iKhokha has grown into one of South Africa’s leading fintech companies, providing card machines, digital payment solutions, and business tools tailored for SMEs. The company supports entrepreneurs by offering accessible financial services, including SME cash advances and digital business management tools.
To date, iKhokha has processed over R20 billion in digital payments annually and has disbursed more than R3 billion in working capital to local small businesses. These tools have enabled thousands of entrepreneurs to start, manage, and scale their ventures.
Matt Putman, CEO and co-founder of iKhokha, said this on the acquisition:
“This is a proud moment for both the founders and the broader iKhokha leadership team. Joining forces with Nedbank gives us the platform to scale our impact, further accelerate product innovation, and unlock new value for our merchants.
There is great alignment across both leadership teams and we believe our combined strengths will result in a truly differentiating and highly competitive value proposition for SMEs in the market. It also opens the door for us to explore expansion into other strategic markets on the continent.
The move also marks a successful exit for iKhokha’s investors,Apis Partners,Crossfin Holdings, and theInternational Finance Corporation (IFC). These investors have played a significant role in supporting the management team in scaling iKhokha’s operations and product innovation.
Apis Partners, which backed iKhokha via its Apis Growth Fund I, focuses on growth-equity investments in financial sector businesses across Africa and Asia.
In a joint statement, Managing Partners at Apis Partners Matteo Stefanel and Udayan Goyal said
“We are incredibly proud of how far iKhokha has come, from a promising fintech startup to one of South Africa’s leading payment providers. Our partnership with Matt and the team has been rewarding, not only in terms of the company’s rapid growth but also its powerful impact on thousands of South African SMEs.
We’re confident that under Nedbank’s ownership, iKhokha will continue to scale its mission of driving financial inclusion and empowering entrepreneurs across the country.”
Crossfin Holdings, another early backer of iKhokha, praised the company’s journey from concept to market leader. CEO Dean Sparrow commented:
“We are extremely proud of what the iKhokha team has achieved and pleased to have found a great home for the business, its people and the SME market it serves.”
Why Nedbank’s Acquisition of iKhokha Matters for SMEs
The acquisition highlights a broader shift in how traditional are adapting to serve an ever-changing SME landscape. With SMEs contributing over 40% to the country’s GDP, the sector represents a significant engine for job creation and economic development, but it has long been underserved by traditional financial institutions.
Fintech companies like iKhokha have filled that gap with flexible, user-friendly, mobile-first services that meet entrepreneurs where their businesses are. These services have been pivotal in reducing barriers to capital and streamlining access to tools that improve financial transparency and management.
For Nedbank, the acquisition presents a strategic acceleration in its push towards platform-based ‘banking’. “This acquisition is a natural evolution of our existing relationship with iKhokha, and we are incredibly excited to welcome iKhokha to our Nedbank family,” said Ciko Thomas, Group Managing Executive for Personal and Private Banking.
Fintech Consolidation: A Rising Trend
This deal also spotlights how fintech has significantly reshaped the startup financing landscape in recent years. Fintech solutions have reduced dependence on traditional banks and enabled more inclusive access to capital.
With traditional banks looking to partner or in this case acquire fintech platforms, this presents a more positivefunding landscape for SMEs. Local fintechs improve transparency in financial transactions, real-time access to financing and reduce the time spent on due diligence often seen in traditional funding applications.
Lungile is the Digital Editor for Startup.Africa, with a knack for storytelling, technology and innovative ideas. Working with Startup.Africa, she takes simple ideas and turns them into amazing stories.
Lungile Msomi
