Crossfin, a South African fintech industry, has been acquired by a consortium of investors for 1.5 billion rand ($94.8 million).
The transaction is one of the largest private equity-led investments in the fintech sector in South Africa to date and offers the consortium exposure to an industry that has and is expected to continue benefitting, among others, from the secular trends of digitalisation and proliferation of payments technologies.
The transaction will see the exit of the founding investors Capital Eye Investments and the Multiply Group who have been anchor shareholders since 2017.
The Consortium is led by Ethos’ Mid-Market Fund I (“EMMF I”) and includes the founding Crossfin executive management team, EMMF I Co-Investors, Ethos Artificial Intelligence Fund I, and leading empowerment investor African Rainbow Capital (“Consortium”). Independent investment banking firm Fairview Partners acted as Financial Advisor on the Transaction.
Crossfin is an independent fintech platform operating predominantly in South Africa with a particular focus on payments technologies and smart funding. Crossfin is led by a highly experienced executive management team with decades of experience in the fintech industry and the broader technology sector.
The current management team co-founded the business and led it since inception. Crossfin operates a differentiated business model based on investing and supporting an ecosystem of synergetic and complementary fintech businesses at different stages of maturity thus creating exposure to high growth opportunities while ensuring positive profitability and cash flows are consistently achieved.
Dean Sparrow, CEO & Anton Gaylard, CXO at Crossfin: “The transaction represents a new phase of growth and maturation for Crossfin. With additional growth capital invested in the business, we are advancing our vision of building and investing in great fintech businesses growing a compelling and mutually beneficial fintech ecosystem to enable growth and efficiencies for economies in Africa and beyond.
“As management we see significant growth underpinned by secular tailwinds in the payments, smart funding and the broader fintech industry, which has seen us effectively re-invest 100% of the proceeds from the sale of our stake back into the business.
“We are thankful to our founding shareholders, Capital Eye Investments, the Multiply Group and Andisa Partners, who supported us from inception to date and enabled us to build this attractive platform.
“We also recognise the tireless effort and commitment from the founders and executive management teams of the businesses within our ecosystem. We are excited at the prospects of working with our new partners to accelerate growth and value creation.
“Our new partners, who bring additional capital and insights to our business, share our passion for entrepreneurship and the fintech industry, and we are confident that with their financial and non-financial support we will be able to further accelerate the growth of the business and help cement Crossfin’s position as a leading fintech platform”
Charmaine Padayachy, Deal Executive, African Rainbow Capital said: “African Rainbow Capital is excited about its investment into Crossfin which represents a further deepening of its own fintech ambitions, which is to establish an ecosystem of relevant fintech type business.
“Crossfin has a capable management team in place that we are confident will continue to add significant value to what is already an impressive track record underpinned by quality and high-growth businesses. We are confident that Crossfin will play a key role in reshaping the financial services landscape and continue to innovate and pioneer as it has done in the past.”