Private equity investor Ethos has invested R700-million in global financial technology (fintech) provider Channel VAS.
The investment is the first under Ethos’ new large-buyout fund, Ethos Fund VII, which is seeking to attract R8-billion in capital commitments from local and institutional investors.
The fund has already secured R2-billion in funds from South African investors and expects to secure a further R4-billion from local investors by the first quarter of 2019.
“The fund successfully held its first close in October to accommodate this transaction and another that is expected to close in the next few months,” Ethos CEO Stuart MacKenzie said in a statement issued on Tuesday.
Ethos added that its maiden Ethos Artificial Intelligence (AI) Fund I, which invests in businesses that can benefit from AI, invested in Channel VAS alongside Ethos Fund VII.
“We are excited to welcome Ethos on board as we continue our journey forward in this fast-moving fintech world.
“As Channel VAS has been at the forefront of the fintech revolution through mobile finance from its very beginning, working together with visionary investors such as Ethos will help us continue to expand our already massive geographical footprint at an even faster pace, bringing financial inclusion to more unbanked and underserved people globally through our innovative services,” Channel VAS founder and CEO Bassim Haidar commented.
Ethos has, over the past 24 months, raised about R6.5-billion from institutional and development investors, including R2.5-billion for its Ethos Mid Market Fund I; more than $100-million in the first close of its Ethos Mezzanine Partners 3 fund, which is targeting $150-million by mid-2019; and R600-million in first close commitments for Ethos AI Fund I.
Ethos has successfully concluded 11 investments in the past year.