South African Fintech Firm, Crossfin, Acquired For $94.3m

South African Fintech startup Crossfin has been acquired by Ethos’ Mid-Market Fund I (EMMF I) and Patrice Motsepe’s African Rainbow Capital (ARC) in a deal worth $94.3m.

The EMMF I and ARC consortium deal will provide the Crossfin with much-needed exposure in Fintech, and according to a statement released by the startup, the sector is one that is exploding as a result of digitalization and snowballing payment technologies.

Specifically, the ARC consortium will provide Crossfin with acquisition and expansion money to enable it to develop organically and pursue new possibilities across South Africa and Africa, according to the conditions of the agreement.

Crossfin’s portfolio includes approximately 134m card and 20m mobile-enabled payment transactions per year.

Charmaine Padayachy, ARC deal executive said the consortium will add to the significance of Crossfin in the Fintech space.

“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,” Charmaine said.

The ARC consortium will receive 37.33% of Crossfin valuation, assuming a mix of acquisition money from existing shareholders and growth capital for targeted portfolio purchases as the firm aims to develop an ecosystem of Fintech-related businesses, according to the company, which has stakes in a variety of sectors including telecoms.

“We believe this is an exciting opportunity underpinned by strong tailwinds in a cutting-edge industry. Crossfin is ideally positioned to continue capturing the payments technology and the broader Fintech opportunity, both existing and emerging. The transaction is an exceptional opportunity to acquire a group with significant value creation momentum,” Edward Pitsi, managing partner at EMMF I and deal lead said.