(Ecofin Agency) - With the acquisition, the South African group reinforces its partnership with Khula, which specializes in the distribution of agricultural inputs and service provision. Absa hopes the deal will help improve its offers to SMEs in the agriculture value chain.
Absa Group, Africa's 5th largest bank by total assets ($105.47 billion as of December 31, 2022) announced on May 12, the acquisition of a minority stake in South African agritech start-up Khula. The amount of the stake acquired was not disclosed.
The acquisition will enable Absa, which finances the South African agricultural sector, to enhance its offers to its SME clients in the agricultural sector. The South African financial group will also support Khula's expansion into other African markets in which it operates.
“The decision to add Absa to our capitalization table is a very strategic and long-term decision. We are aligned in our interests and how we see the industry transforming over the next few years,” said Khula’s CEO Karidas Tshintsholo.
The transaction strengthens the partnership between Absa Group and Khula. According to Absa, the two groups had collaborated for the introduction of a secure payment gateway to facilitate transactions on Khula’s platform.
Khula was founded, in 2018, by Karidas Tshintsholo, Matthew Piper, and Jackson Dyora. In August 2021, it raised $1.3 million in seed funding to scale its platform and fund expansion to additional South African cities.
In 2018, the agritech, which allows restaurant chains and large companies to source directly from farmers, indicated plans to expand beyond the South African market. It said it was exploring opportunities in East Africa, specifically Kenya, but also in West Africa, through Nigeria.