Lesaka Technologies, has acquired 100% South African digital bank Bank Zero Mutual Bank in a share and cash deal.

The deal will see shareholders of Bank Zero own approximately 12% of Lesaka’s fully diluted shares and receive up to ZAR 91 million ($5.1 million) in cash. The transaction is awaiting regulatory approvals.

According to Lesaka Chairman Ali Mazanderani, “The acquisition of Bank Zero is a transformative event in Lesaka’s journey, enabling us to better serve our consumers, merchants and enterprise clients by embedding a trusted, well-engineered neobank capability into our fintech platform. I am delighted to welcome the Bank Zero team to Lesaka as partners.”

Founded in 2018, Bank Zero seeks to provide a better banking experience for its customers, offering a secure, app-driven platform designed to give individuals. Bank Zero had a deposit base in excess of ZAR 400 million, and more than 40,000 funded accounts across South Africa by the end of April.

The combination of Bank Zero’s digital banking infrastructure and its operational banking license, together with Lesaka’s fintech and distribution platform, is intended to transform the way Lesaka is able to conduct business in the future, offering key financial, strategic and regulatory benefits.

Yatin Narsai, CEO of Bank Zero, said: “Joining forces with Lesaka allows us to accelerate that mission at scale – reaching more customers, faster – while staying true to the principles that define who we are. It represents a critical step for Lesaka and Bank Zero in realizing new revenue streams, improving capital efficiency and unlocking synergies across our ecosystem.”

Lesaka expects the transaction to be accretive to its shareholders, with Bank Zero expected to be profitable in the fiscal year following completion of the transaction.

Following completion of the transaction, Michael Jordaan will join the Lesaka Board of Directors, while Yatin Narsai will continue as CEO of Bank Zero. The broader Bank Zero leadership team will remain in their current roles.

Chairman of Bank Zero, Michael Jordaan, said: “We are confident that the synergies between our digital banking infrastructure and Lesaka’s fintech reach will create sustainable value for all stakeholders.”

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