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HomeLatviaSouth African Bank Acquires Shares of Latvian Fintech Company in Landmark European...

South African Bank Acquires Shares of Latvian Fintech Company in Landmark European Investment Deal

In March, a deal was finalised between one of South Africa’s leading banks Capitec Bank and fintech company AvaFin to acquire a controlling stake. The transaction represents a unique case in the European non-banking sector – according to publicly available information, this is the first high-profile acquisition of a stake in a private fintech company by a bank with a view to invest in an online consumer lending platform for individuals.

AvaFin serves approximately two million customers across five countries, providing around 70,000 consumer loans per month, marking this deal as a huge step forward in the development of the non-banking sector, which in recent years has experienced rapid growth not only in Europe, but also globally. This is also proof that Latvia’s financial sector is home to dedicated, highly skilled, and outcome-oriented minds capable of delivering a globally competitive service and achieving international recognition. With the ongoing wave of development in the financial sector and given the current geopolitical climate, it is important to send a clear signal to investors that Latvian specialists are well-equipped to create exportable products and offer their expertise to cross-border partners,” explains Matīss Ansviesulis, co-founder of AvaFin.

Capitec Bank has a total market value of approximately EUR 15 billion, serves more than 21 million customers, and currently employs an estimated 15,000 staff. With the closing of the transaction, Capitec Bank has become the majority shareholder in AvaFin, a company with an expected turnover this year of EUR 150 million, heralding a new phase in the growth of the two businesses. As indicated by Capitec Bank CEO Gerrie Fourie, the acquisition of a majority stake in AvaFin is part of the bank’s international expansion strategy.

“Acquiring a controlling stake in AvaFin is a strategic opportunity to diversify our income sources and build on our experience in foreign markets. Our internationalisation approach is measured and controlled.  Rather than acquiring large businesses or pursuing new banking licences, which can be costly and time-consuming, we have identified AvaFin as an ideal partner – a small, agile credit business with exposure to multiple markets, strong credit principles, and a high-potential management team,” reveals Fourie in the company’s public statement.

“We are delighted that our work has been recognised not only in Europe, but also further beyond the Latvian borders. In the ten years since the company was founded, we have become a trusted name in the financial sector, annually lending more than half a billion euros to consumers in Poland, Czechia, Latvia, Spain, and Mexico. Following the transaction with Capitec Bank, AvaFin is in safe hands, and I am certain that the company will experience a new surge in growth. This strengthens our confidence to continue creating new services, develop fintech businesses in other areas of activity and, using the experience gained over the years, contribute to the advancement of the non-banking sector in Latvia and around the world. We have already started building a relationship with partners in the Middle East and I have no doubt that our expertise will be highly appreciated in this region as well,” says Dāvis Barons, co-founder of AvaFin.

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