South African fintech specialist e4 today announced its acquisition by a consortium of private equity investors, led by independent private equity fund manager Infinite Partners.
The transaction, valued in excess of R1 billion, will see e4 obtain the necessary capital for advancing to the next stage of its expansion.
e4 is a technology company that provides custom solutions and services, including software development and business automation. With a focus on software-as-a-service (SaaS), e4 leverages technology to transform customer processes.
The e4 executive team, experienced in software development for value creation, drives diversification across industries and adjacent geographies, says the company.
Proptech push
By repurposing its early-stage technology, e4 has developed solutions that address the needs of various sectors, with a presence within the property technology (proptech) space, it adds. As a result, e4 has become a central figure in numerous transactional ecosystems.
The broader e4 Group employs over 200 professionals. In 2021, it launched a group in the UK, with a focus on building e4’s relationships with mortgage lenders, conveyancing firms and other partners in the UK.
According to the company, this strategic acquisition by Infinite Partners provides e4 with the necessary resources and support to further expand its reach.
The transaction includes 27four, a diversified financial services group that invests money and supports independent asset managers.
Infinite Partners is an African private equity fund manager, established in 2022 following its spin-out from Ethos Private Equity.
Edward Pitsi, Infinite Partners CEO, says: “e4’s strongest growth potential lies in continuing to do what it does very well and thus growing the penetration of its current products and following its well-established ‘blueprint adoption’ in its customers.
“We are very excited by the opportunities for e4 to grow into other adjacent areas, while retaining a strong market position in the current verticals it services. The business has recently expanded to the UK, which has a TAM [total addressable market] in excess of 10x the SA market – we will be supporting management through this expansion, as it can have a material impact on ultimate outcomes.
“Our experience in managing growth agendas, providing strategic input and growth capital will be fundamental in supporting delivery on the opportunity set.”
He adds the strength of e4’s leadership was pivotal in Infinite Partners’ decision to invest in the business.
“From our first engagement, we were impressed with e4’s management team, which has been fully professionalised, with key positions occupied by individuals who have experience but are still hungry to grow the business and take it to greater heights.
“We look forward to seeing e4’s management leverage their experience, knowledge and client relationships to spearhead strategic growth. As investment partners, we will look to be supportive, yet challenging, in order to drive the appropriate outcomes alongside management.”
Tangible opportunities
Naomi Nethengwe, Infinite Partners principal, concurs: “With its proptech offering, e4 operates within digital and tech, a sector that Infinite Partners has identified as having structural growth potential.
“Proptech is a niche segment of the economy. We foresee a substantial runway for international expansion due to the exportability and global relevance of e4’s technology stack. There are also tangible opportunities to expand to other industries that are looking to reduce friction in document generation, management and storage processes.”
Chad Potter, group executive and private markets principal at 27four, says: “e4’s SaaS business model aligns with their investment strategy of focusing on mid-market businesses with potential for growth and social impact.
“The investment will support e4 in diversifying its SaaS offering, expanding globally and improving its B-BBEE credentials.”
e4 group CEO Grant Phillips says the investment is a natural fit for e4’s broader strategy. “The e4 Group has been on a successful journey of sustainable growth and expansion over the past several years.
“This has involved expanding our relationships and value creation with our local strategic partners, as well as focusing on revenue diversification and geographic expansion. With some of these initiatives being in their infancy, the timing of this new partnership comes at an opportune time for the business.
“The entire consortium is aligned to the organisation’s strategy, supportive of the team tasked with executing on it and have already started providing input on additional opportunities that we have jointly identified.”
Phillips says the consortium’s diversified portfolio mix and investor profile present an opportunity to unlock synergies, target closer strategic relationships and partner more effectively within the equity pool.
“Alongside these asset-based opportunities, the enterprise also sees immense value in leveraging the many years of organisational expertise and experience within the consortium to improve how we continue our growth trajectory in a sustainable, exponential way.”
Share