Crossfin inks BEE deal with Isaac Mophatlane-led consortium
African fintech holding company Crossfin plans to accelerate rollout of financial services to more financially excluded South Africans, as well as across the continent.
This is according to CEO Dean Sparrow, speaking about the company’s latest business venture with Andisa Partners, a black empowerment consortium led by former BCX CEO Isaac Mophatlane and KwaZulu-Natal industrialist Gcina Zondi.
Mophatlane and Zondi’s investments in Andisa Partners are via the Mpumi Marang Family Trust and Imbewu Capital Partners, respectively.
According to the fintech firm, the deal includes a cash subscription for 20% of Crossfin equity via a fresh issue of ordinary shares. In addition, a capital injection will be applied to support Crossfin’s organic and acquisitive growth strategy.
For Sparrow, the deal brings together a team of like-minded investors that have spent the majority of their careers building and investing in successful ICT businesses delivering products and services across the African continent.
“Since its founding just over two years ago, Crossfin, on an annualised basis, has shown in excess of four times revenue growth and our portfolio companies have increased their reach into market segments that were poorly serviced by traditional financial services players.”
The Crossfin group owns stakes in several companies in the fintech industry, including Innervation, WiGroup, Emerge Mobile (including iKhokha), Alacrity and Blue Garnet Ventures. Its portfolio companies process more than 134 million card and 20 million mobile-enabled payment transactions across more than 9 000 retail stores, with over 110 000 point-of-sale lanes in seven African countries.
The company has also made a number of key investments, the latest being in Retail Capital, a South African-based provider of alternative business funding to the SME sector, for an undisclosed amount.
Mophatlane, co-founder and former BCX CEO, joined Crossfin as a non-executive director in December 2017.
“The Crossfin story is a story of financial inclusion, financial independence and financial well-being for Africa,” Mophatlane comments. “Through the high-growth portfolio companies, we are enabling consumers and SMMEs daily to help create a cashless society supported by seamless payment channels.”
He adds: “Crossfin is a model of collaboration, independence and innovation, and is well-positioned to take advantage of the huge potential in emerging markets across Africa. We also have a long-standing and very successful relationship with the leadership teams at Crossfin and co-investors, the Multiply Group.”
Crossfin notes the deal is supported by its investment partner, the Multiply Group.
Matthew Blewett, founding shareholder and executive partner, says Crossfin is fast becoming South Africa’s largest independent fintech group, with outstanding growth and impact potential.
“Supporting Crossfin has proven not only to be an excellent investment decision, but also a vehicle through which the Multiply Group can positively contribute to unlocking financial services in market segments whose growth is essential to South Africa’s economic prospects. We’re excited to extend our partnership with Crossfin through the Andisa Partners investment.”
On potential plans to list on the Johannesburg Stock Exchange, Sparrow points out the current market conditions do not support a listing in the short-term.
“We will continue to consider this option, which was our initial stated intent when we set out on the Crossfin journey in 2017.
“We have a healthy pipeline of investment opportunities that we’ll continue to investigate. Following a very busy period, we are spending the next few months bedding down the transactions we have concluded over the past 12 months.”