CROSSFIN, a player in the South African fintech industry, has been acquired by a consortium of investors (“Consortium”).
The transaction will see Crossfin secure the required capital to pursue the next phase of its growth. 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.
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.
The differentiated business model of Crossfin has allowed the platform to consistently achieve robust top line and earnings growth, and a top quartile Gross Internal Rate of Return to shareholders despite very limited access to capital to support growth. The performance of the business and its management team was achieved during a particularly challenging economic environment and despite the impact of the Covid-19 pandemic and associated lockdown measures implemented in South Africa in 2020 and 2021.
