Consortium acquires fintech specialist e4 in deal valued at over R1bn

In yet another move that demonstrates the growing interest in financial technology platforms by private equity players, SA fintech specialist e4 has been acquired in a deal valued at more than R1bn. 

On Monday, e4 said it has been acquired by a consortium of investors led by African private equity fund manager Infinite Partners. The acquisition will provide the company with capital to expand its reach and continue its mission of “transforming businesses through cutting-edge digital solutions.”

The largest capital raises in recent times for local start-ups have been $120m (R2.28bn) for Jumo, led by Fidelity Management & Research at a $400m valuation; $48m for Ozow, led by China’s Tencent; and $83m for Yoco. All three are fintech firms.

Insurance technology platform Naked recently raised $17m in a third round of funding. 

Private equity firms are getting in on the action with Andile Ngcaba’s Convergence Partners announcing in April it had invested $10m into 42Markets Group, an incubator, investor and builder of fintech companies.

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 uses its technology expertise to help change and improve customer processes. 

Over the years, the company has gained a foothold in the property sector.

The group employs more than 200 dedicated professionals and in 2021 launched a new unit in the UK with a focus on building its relationships with mortgage lenders, conveyancing firms and other partners.

The acquisition by Infinite Partners also includes 27four, a financial services group supporting independent asset managers.

Infinite Partners was established in 2022 after a spin out from Ethos Private Equity, and is known for its focus on “ethical sustainable investing” and growth investments in companies benefiting from digitisation and technology adoption.

Edward Pitsi, CEO of Infinite Partners, said: “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. Finally, the business has recently expanded to the UK which has a TAM 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,” Pitsi said.

All this comes at a time when the SA fintech sector is gearing up for increased regulation in line with moves by lawmakers on the rest of the African continent. 

gavazam@businesslive.co.za