Introduction: Lesaka’s Strategic Acquisition Lesaka Technologies, a Nasdaq-listed fintech company, has officially completed the acquisition of fellow fintech firm Adumo for $96 million. The deal, which includes $13 million in cash, marks a significant step in Lesaka’s growth strategy as it strengthens its foothold in the Southern African fintech market. The acquisition price is $10 million higher than initially reported in May 2024, driven by a 27% increase in Lesaka’s share price, further underscoring the positive market reception.
Adumo’s Integration into Lesaka: Expanding Reach and Capabilities The acquisition brings Adumo under the Lesaka umbrella, further establishing the group as a major fintech player in Southern Africa. Paul Kent, CEO of Adumo, expressed his enthusiasm for the deal, stating, “We are thrilled to be joining the Lesaka group, creating a Southern African fintech of significant scale, with leading positions in several verticals and sectors.” With the approval of Lesaka shareholders and South Africa’s Competition Commission, the acquisition was finalized in September 2024.
Adumo’s integration will significantly expand Lesaka’s reach. The company now boasts 1.7 million active consumers and a network of 120,000 merchants across the region. Lesaka is also adding 3,300 new employees to its workforce, further boosting its presence in South Africa, Namibia, Botswana, Zambia, and Kenya. This expansion strengthens its competitive edge in the region, where rivals like YOCO are only operational in South Africa.
Adumo: A Fintech Leader with a Robust Product Offering Founded in 2019 and headquartered in Cape Town, Adumo provides a range of financial services that include card-acquiring point-of-sale (POS) devices, integrated payments, and reconciliation services to merchants and consumers. The company processes over R24 billion ($1.3 billion) annually, serving 23,000 merchants and 240,000 consumers through its technology platforms. Adumo’s expertise in payments technology makes it a valuable addition to Lesaka’s portfolio.
Lesaka’s Existing Portfolio and Future Growth Strategy Lesaka, which has a market capitalization of $310 million, is already a well-established player in the payments sector. The company owns EasyPay, a prominent payment provider, and Kazang, a card-acquiring POS device company that offers digital payment solutions across Southern Africa. Earlier this year, in February 2024, Lesaka also acquired Touchsides, a point-of-sale provider, for an undisclosed sum. These acquisitions reflect Lesaka’s broader strategy to build a comprehensive fintech ecosystem in the region.
Looking ahead, Lesaka plans to pursue further acquisitions to fuel its growth. The company has identified “several potential targets” that could complement its existing operations. This acquisition spree is expected to help the company consolidate its position as a leader in the fintech space and gain further market share in Africa.
Financial Performance and Challenges Despite its strategic growth initiatives, Lesaka faces financial challenges. In its latest financial results, released in August 2024, the company reported an 11% increase in revenue, reaching R10.6 billion, a testament to its growing business operations. However, Lesaka also recorded a net loss of R326 million for the fiscal year ending in June 2024, reflecting ongoing challenges as it invests heavily in expansion and acquisitions.
Conclusion: A Key Milestone for Lesaka Technologies Lesaka’s acquisition of Adumo is a key milestone in its journey to becoming a fintech powerhouse in Southern Africa. The deal will help the company solidify its market share, broaden its services, and enhance its ability to compete with both regional and global players. With more acquisitions on the horizon, Lesaka is positioning itself as a leading force in the financial technology sector across the continent, poised for continued growth and innovation.
