Pepkor Holdings has announced the combination of its wholly owned fintech subsidiary, Flash, with Shop2Shop to create one of South Africa’s largest merchant commerce and fintech platforms, with annual transaction throughput exceeding R200 billion.

Following the transaction, Pepkor will hold a controlling 57.1% stake in the combined business, FintechCo. The deal implies a total equity valuation of approximately R21.3 billion and is expected to unlock significant strategic and operational synergies while supporting Pepkor’s long-term fintech ambitions.

The new platform brings together complementary businesses serving South Africa’s fast-growing informal economy. Shop2Shop has built a broad merchant acquiring and payments network with strong upstream capabilities, while Flash has established a leading downstream platform for value-added services (VAS), digital products and financial services. Together, the businesses will provide integrated solutions spanning cash handling, payments, merchant services and financial products for informal traders.

Pepkor to Combine Flash and Shop2Shop in R21.3 Billion Fintech Deal

South Africa’s informal economy continues to expand, driven by resilient consumer demand and increasing merchant participation, creating significant opportunities for digital financial services providers.

Peter Berry, Founder and CEO of Shop2Shop, said the transaction would accelerate the company’s mission of empowering small businesses through technology.

“Shop2Shop was founded to deliver purpose-built solutions for South Africa’s underserved informal merchant market. By combining with Flash, we can deepen our product offering, expand our scale and strengthen our position as a leading fintech platform,” he said.

The transaction also strengthens Pepkor’s Informal Market Platform segment and supports its strategy to build an integrated fintech ecosystem. The company believes the combination will diversify earnings, accelerate growth and create additional shareholder value through the planned future listing of FintechCo.

Garth Napier, Chief Commercial Officer of Pepkor, described the deal as a major strategic milestone.

“This transaction is transformative for Pepkor and represents the logical next step in expanding our participation across the informal market value chain. It extends the reach of our financial services ecosystem while supporting our ambition to build a leading digital bank with a nationwide distribution footprint,” he said.

To complete the transaction, Pepkor will invest R1.57 billion through a cash subscription for new Shop2Shop shares and contribute its entire shareholding in Flash, valued at R10.6 billion. The transaction remains subject to customary conditions, including regulatory and competition authority approvals.

//Staff writer