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Landmark deal valued in excess of R1 billion
A consortium led by independent private equity fund manager, Infinite Partners, has today announced its acquisition of South African fintech specialist, e4. The transaction will see e4 obtain the necessary capital for advancing to the next stage of its expansion.
Infinite Partners is an African private equity fund manager, established in 2022 following its spin out from Ethos Private Equity. Founded on a bedrock of ethical sustainable investing for good, Infinite Partners are both value and values-driven partners, seeking growth investments alongside visionary management teams.
Left to Right: Grant Phillips , Adri Führi and Fikile Sibiya.
In keeping with an investment strategy centred on companies benefiting from digitisation and technology adoption tailwinds, Infinite Partners’ interest in e4 is a result of the company’s demonstrated track record of being at the cutting edge of key process digitisation both in South Africa and in the UK market.
e4 is a forward-thinking technology company that provides custom, innovative solutions and services, including software development and business automation. With a focus on software as a service (SaaS), e4 leverages its technology expertise to completely transform customer processes, positioning itself as a pioneer of digitalisation in South Africa. For over 20 years, e4 has been building on its strong foundation as a leading digital transformation specialist, with digital enablement as a core element of its ethos.
The e4 executive team brings a wealth of experience in software development for value creation, consistently driving successful diversification across industries and adjacent geographies. By repurposing its early-stage technology, e4 has developed innovative solutions that address the needs of various sectors, with a notable presence within the proptech space. As a result, e4 has become a central figure in numerous transactional ecosystems. The broader e4 Group employs over 200 dedicated professionals and in 2021 launched a new group in the United Kingdom with a focus on building e4’s relationships with mortgage lenders, conveyancing firms and other partners in the UK.
This strategic acquisition by Infinite Partners provides e4 with the necessary resources and support to further expand its reach and continue its mission of transforming businesses through cutting-edge digital solutions. The transaction includes 27four, a diversified financial services group that invests money innovatively and supports independent asset managers.
Commenting on the rationale behind the transaction, Edward Pitsi, Infinite Partners CEO, notes, “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 growth opportunities for e4 to grow into other adjacent areas whilst 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.”
He adds that 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.”
Naomi Nethengwe, Infinite Partners Principal concurs, “With its proptech offering, e4 operates within digital & tech, a sector that Infinite Partners has identified as having structural growth potential. Proptech is a niche segment of the economy, and it has taken a significant amount of time and investment to build this world-class technology stack. 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.” He also notes e4's highly defensive and resilient nature and sees the depth and experience of its management team as key strengths for driving innovation, as well as forming and leveraging existing customer relationships.
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 that the consortium’s diversified portfolio mix and investor profile present an exciting 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.”
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