Apis Growth Fund I Exits Position in Leading Payments Company Adumo

London, 8th May 2024 – Apis Growth Fund I (the “Fund”), a private equity fund managed by Apis Partners LLP (“Apis”), a UK-based asset manager that supports growth stage financial services and financial infrastructure businesses, will have fully exited its position in South African merchant acquirer Adumo following Adumo’s acquisition by South African Fintech Lesaka Technologies, Inc (“Lesaka”), announced yesterday. The deal is expected to complete upon receipt of competition commission approval, and a subsequent restructuring will result in the Fund receiving proceeds of the transaction in Lesaka shares.

Apis was formed 10 years ago with the parallel goals of achieving superior returns for investors alongside creating positive societal impact, the latter underscored by the firm’s recent recognition as a global leader in the ImpactAssets 50 database.

Payment solutions specialist Adumo was established in 2019 with investments from the Fund and Crossfin Holdings (“Crossfin”). The investment by the Fund and Crossfin was used to catalyse the merger of three premium payments businesses that anchored the Adumo platform: Sureswipe, Ikhokha and Innervation.

Adumo currently serves c.70,000 active clients and processes c. R80 billion transactions annually via payment devices that can be fully integrated into the merchants’ business. Following the acquisition by Lesaka, it is estimated that the full Lesaka ecosystem will serve 1.7 million active clients, 107 000 merchants, and process over R250 billion in throughput (cash, card and VAS) per year.

The successful partnership between Apis, Crossfin and Adumo reflected a shared commitment to financial inclusion and advancing sustainable economic growth across Africa. Since the Fund’s investment, Adumo has narrowed the payment acceptance gap in South Africa, where 80% of adults are banked, with an average of 2.3 cards per person, yet payments in the SME segment remained predominantly cash-based. Apis’ and Crossfin’s efforts in enhancing the product offering within the Adumo group bolstered digital and mobile transactions in these businesses, leading to increased footfall and customer retention.

Over the course of the Fund’s investment, Apis was instrumental in significant value creation initiatives at Adumo, boosting the company’s reputation in delivering tailored payment solutions that address the unique challenges and opportunities within the African market. With their sector-specific expertise, Apis and Crossfin teams leveraged local and global networks to source and assist Adumo with the execution of multiple acquisitions, including GAAP and Wirecard South Africa, substantially increasing Adumo’s geographic footprint. Support was also provided by the Apis team for Adumo’s large scale capital raises, securing key funding from the IFC, amongst others, to accelerate Adumo’s growth.

Matteo Stefanel, Co-Founder and Managing Partner at Apis Partners, commented: “It has been a pleasure to work with all at Adumo over the past few years. Our teams’ shared goals of impact creation and increasing financial inclusion are demonstrated by Adumo more than doubling the value of transactions it processes for SMEs in South Africa during the Fund’s holding period. We believe the transition into Lesaka’s ecosystem is a perfect fit for Adumo’s next phase, and we look forward to being a part of it as Lesaka shareholders.”

Udayan Goyal, Co-Founder and Managing Partner at Apis Partners, added: “We are very pleased to announce the sale of the Fund’s interest in Adumo, which marks a significant achievement for both Apis and Adumo. Adumo was a pioneer in using a verticalisation approach to provide the best in class service to its clients. This transaction underscores Apis’ commitment to identifying and investing in innovative, high-growth opportunities within the financial services and technology sectors.”

Dean Sparrow, CEO at Crossfin: “Having been the co-creators of Adumo we are delighted to have found an exceptional home for the Group and see this next step in Adumo’s growth journey as an incredibly exciting and logical evolution for the business, its customers and staff alike.”

The Fund’s divestment from Adumo follows the recent successful sale of Retail Capital, another asset held by the Fund and part of the broader thesis to provide business solutions to underbanked SMEs, to TymeBank. The Fund still holds an interest in iKhokha, which was unbundled from the Adumo platform in 2023.

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About Apis Partners

The Apis Group (“Apis”) is an ESGI-native global private equity and venture capital asset manager that supports growth-stage financial services and financial infrastructure businesses by providing them with catalytic growth equity capital. Collectively Apis, through its team of around 40 professionals with deep industry expertise, manages or advises on total committed capital from investors (including drawn and invested capital) of c.US$2 billion.

Including its headquarters in London, Apis has representation in eight countries across Europe, Asia, and Africa. Apis is highly conscious of the developmental impact that the provision of growth capital for financial services and financial infrastructure businesses in growth markets can achieve, and as such, financial inclusion is a core tenet of Apis’ approach and investment mandate.

https://apis.pe/