Lesaka buys Bank Zero for R1.1 billion

Bank Zero chairman and co-founder Michael Jordaan announced that Lesaka Technologies bought their bank for R1.1 billion, pending regulatory approvals.

Bank Zero was founded seven years ago by Jordaan, banking innovator Yatin Narsai, and five other co-founders. It is 45% black-owned and 20% women-owned.

The mutual bank, registered with the South African Reserve Bank in 2018 and launched in 2021, offers low rates for personal and business banking.

Bank Zero uses IBM Z mainframe computers and LinuxONE as a secure platform that can protect against data breaches with IBM’s Secure Service Container.

It has no physical bank branches and operates as a fully digital bank through its mobile app, available on both Android and iPhone.

Several major banks had also launched low-cost accounts with digital-only sign-ups to compete in the tussle for affordability-focused customers.

Although Bank Zero did not achieve the same growth as competitors like Discovery Bank and TymeBank, it has a different business model.

Because Bank Zero was built from the ground up with efficiency in mind. This gave it the freedom to grow gradually without the need for aggressive marketing.

Its initial focus was proving its unique problem-solving concept of a patented card immune to fraud and phishing.

The bank said that this strategy had attracted a disproportionate number of businesses and high-income earners to its services.

“These higher-value target segments provide healthy and steady growth,” Bank Zero Said.

Another key segment has been digitally savvy customers seeking fraud-resistant yet straightforward solutions.

The bank reported that deposits, card purchases, and electronic fund transfers are increasing continuously, with year-on-year growth exceeding 50%.

Bank Zero has recorded deposits of roughly R400 million. For the year ending December 2024, card spending totalled R415 million across its customer base.

“We’re now tracking ahead of plan with expected break-even by 2027. Our challenge is to try and get there much sooner,” it said.

Lesaka buys Bank Zero

On Thursday, 26 June 2025, Bank Zero co-founder and chairman Michael Jordaan announced that Lesaka Technologies had acquired Bank Zero for R1.1 billion.

“There are lots of regulatory approvals still needed, but both teams are excited about the merger synergies,” he said.

Jordaan added that, following the acquisition, he will remain the chairman of Bank Zero and that the management team will remain intact.

The acquisition consideration will be settled through a combination of newly issued shares and up to R91 million in cash. Bank Zero shareholders will own approximately 12% of Lesaka’s shares.

Following the completion of the transaction, Michael Jordaan will join the Lesaka Board of Directors, while Yatin Narsai will continue as CEO of Bank Zero.

Lesaka Technologies, formerly Net1, is a South African financial technology company listed on the NASDAQ and the Johannesburg Stock Exchange (JSE).

It was founded by Serge Belamant, who also developed its basic technology. He left the company in 2017 under a separation agreement filed with the SEC.

In 2020, Value Capital Partners invested R580 million in the company and initiated a process of redefining its strategy, appointing a new board and management team.

In 2021, the company appointed Chris Meyers as its new CEO. A year later, Net1 rebranded as Lesaka Technologies, which coincided with the R3.7 billion acquisition of the Connect Group.

Lesaka’s primary focus is on financial inclusion, offering financial services to previously underserved communities and merchants.

The company, headquartered in Johannesburg, managed Botswana and South Africa’s social grant payment system until 2018.

Meyer stepped down as Lesaka’s CEO in 2023. Ali Mazanderani was appointed as executive chairman, and former chairman Kuben Pillay became lead independent director.

The company has been on an aggressive acquisition spree in recent years, which included buying Touchsides, a platform-as-a-service and software-as-a-service solutions provider.

In May 2024, Lesaka Technologies acquired Adumo, a payment platform headquartered in Cape Town, for $85 million.

“Lesaka expects the transaction to support a more optimised balance sheet in the future, allowing the group to finance the existing and continued growth in lending books through customer deposits,” it said.

This will drive stronger lending unit economics, while the reduction in the use of bank debt in the group’s Consumer and Merchant Divisions will help deleverage Lesaka’s gross debt.

”Post completion, and subject to regulatory approval, Lesaka could achieve more than ZAR 1.0 billion reduction in gross debt,” the company said.

The proposed transaction is subject to the satisfaction of customary closing conditions and regulatory approvals ordinarily required of a transaction of this nature.

These include approval from the Prudential Authority, a division of the South African Reserve Bank, Competition Commission approval, and Exchange Control approval.