Tuesday, January 18

Fintech Crossfin sold in a R1.5bn deal


Crossfin Technology holdings, a South African fintech investment company, has been acquired by a consortium of investors, including Patrice Motsepe’s African Rainbow Capital (ARC), for R 1.5 billion.

The consortium is led by Ethos’s Mid-Market Fund I and includes Crossfin’s founding executive leadership team, EMMF I co-investors Ethos Artificial Intelligence Fund I, and empowerment investor ARC. Fairview Partners acted as financial advisers for the transaction, which will see the departure of founding investors Capital Eye Investments and Multiply Group.

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“The transaction is considered a landmark deal in the fintech industry and will see Crossfin raise the capital necessary to continue the next phase of its growth,” Crossfin said in a statement Wednesday.

“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 benefited and is expected to continue to benefit, among others, from secular trends in the digitization and proliferation. of payment technologies ”.

Crossfin operates primarily in South Africa and has a particular focus on smart financing and payment technologies. It has three main pillars:

  • Payment technologies: Its main investment here is Adumo, an independent omnichannel payment acquisition company in South Africa that processes around 200 million payment transactions per year at 50,000 merchants. Adumo owns the well-known payment brand iKhokha. The segment also includes Crossgate Holdings, which specializes in issuing cards for retailers, banks and non-bank financial institutions.
  • Smart financing: Crossfin is an investor in Retail Capital, which uses transactional data to provide financing to small, medium and micro businesses, a segment that is “underpenetrated by conventional financial institutions and where there is a significant financing gap”. Retail Capital’s business model is based on its “Low Touch Merchant Cash Advance” product, “leveraging its proprietary technology platform to analyze merchant transactional payment data to determine payment capabilities and scale funding accordingly.” .
  • Risk capital: Crossfin Ventures (CV) is the venture capital arm of the Crossfin Group. “Despite being the smallest of the three current Crossfin segments (estimated to be less than 5% of value), CV plays a critical role within the Crossfin ecosystem by allowing the company to gain initial exposure to emerging trends. in the fintech industry. “Crossfin said.

In addition to these three segments, Crossfin is in the process of acquiring Sybrin, an “AI-enabled, low-code enterprise software business targeting the financial sector with a focus on automation and using artificial intelligence and machine learning to achieve efficiencies. For your customers “.

The new investors will provide growth capital to enable Crossfin to invest organically and pursue new opportunities in South Africa and the rest of Africa.

Duncan McLeod is an editor at TechCentral, where this article was first published. here.

© 2021 NewsCentral Media


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