JSE-listed financial services provider Purple Group has sold a 30% stake valued at R100 million in its Easy Equities business to Sanlam Investment Holdings in a cash deal. Sanlam will receive a seat on the board as part of the investment.
Headed by CEO Charles Savage, Easy Equities offers accessible investing and trading solutions for the man on the street, from fully managed investment solutions to DIY trading and investment platforms.
Easy Equities was the overall winner of the 2016 African FinTech Awards at the Finance Indaba in October. The revolutionary platform allows anyone to invest in the JSE by accepting fractional investments in popular shares as small as R10 for 65c per transaction. Investors have been signing up in their droves over the past year.
The division, however, is still loss-making, and because of this, Purple Group searched for a "strategic partner" to fund development of the platform and focus on marketing and distribution. The firm estimates that it will need to double its current client base of 40 000-45 000 to near profitability. It also has plans to broaden its reach beyond South Africa in the next six months.
"We needed to marry the business with an organisation that provides us with distribution and capital, but also, and more importantly, one that shares our vision to democratise access to share investments," said Savage. "And we found that easily in Satrix when we started working with them, and the natural progression of that is to work with Sanlam. FinTech 2.0 is all about marrying great ideas and great businesses with great distribution, balance sheet and brand, and I think that's exactly what we've achieved in this transaction."
"Easy Equities now has R100 million on its balance sheet. That ensures that the 24-36 month business plan is appropriately funded and that we can not only build the distribution in South Africa, but also take the platform globally."
