South African billionaire Patrice Motsepe’s ARC to acquire Crossfin fintech platform

African Rainbow Capital (ARC), a Black-owned and -controlled investment holding founded in 2014 by South African billionaire Patrice Motsepe, has teamed up with Ethos Mid-Market Fund I to acquire Crossfin Technology in a R1.5-billion ($94.5 million) transaction.

Crossfin is a leading player in the South African fintech industry.

The firm operates with a focus on payment technologies and smart funding under CEO Dean Sparrow and CXO Anton Gaylard.

The acquisition of Crossfin by the consortium of institutional investors, including ARC and Ethos Mid-Market Fund I, marks a landmark deal in the fintech industry that will see Crossfin secure the requisitee capital to pursue the next phase in its growth.

According to the agreement, following the deal’s conclusion, the investors will provide acquisition and growth capital to the fintech firm, as Crossfin is acquiring Sybrin, a low-code and AI-enabled enterprise software business targeting the financial sector, to achieve efficiencies for clients.

The growth capital to be committed following the deal’s completion will enable Crossfin to invest organically and pursue new opportunities in South Africa and throughout Africa.

The deal, which unlocks value for the exiting-founding investors, Capital Eye Investments and Multiply Group, is one of the most significant private equity-led investments in the fintech sector in South Africa to date.

In addition to the growth prospect from the acquisition, the deal offers ARC and Ethos exposure to the fintech industry, which has already and is expected to continue to benefit from secular trends in digitalization and the proliferation of payment technologies.

ARC Deal Executive Charmaine Padayachy said the investment further deepens ARC’s fintech ambitions, establishing an ecosystem of relevant fintech-type businesses.

“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,” he said.

Meanwhile, Sparrow disclosed that the transaction represents a new phase of growth and maturation for Crossfin. He added that growth capital investments in the business will help the fintech platform advance its vision of building and investing in great fintech businesses and growing a compelling and mutually beneficial fintech ecosystem.