South Africa: PAPE Fund 3 invests in software company
PAPE Fund 3, a mid-market South African private equity fund, has acquired an equity interest in Entersekt, a device identity and payment authentication company. The transaction achieved financial close in Franschhoek, during the final night of the SAVCA conference on Thursday 24 May 2022.
Entersekt was founded in Stellenbosch in 2010. The company’s software currently secures over 1 billion transactions every month, protecting financial services customers across the globe.
The company’s existing shareholder base includes Nedbank Private Equity, Rand Merchant Investment Holdings (RMI) and the US-based investor group Accel-KKR.
“We are thrilled to welcome PAPE on board,” says Schalk Nolte, CEO at Entersekt. “The fund has a very strong footprint in our home market in South Africa, and their expertise will bring a valuable perspective alongside our existing shareholders. PAPE’s investment helps us further bolster operational support as we scale Entersekt in our strategic focus regions. We look forward to achieving great success together.”
“The business is a global market leader in the digital security landscape off the back of a scalable world class IT infrastructure and architecture. At PAPE we back local entrepreneurs with a globally competitive edge and offering that are looking for a partner that can provide strategic value-add and expansion capital. In the Entersekt team and shareholding structure we believe we are poised for stellar growth,” said PAPE Fund Managers principals, Dr Zuko Kubukeli and Ikageng Moatshe, in a statement.
PAPE Fund 3 is a limited partnership, private equity fund managed by PAPE Fund Managers. PAPE Fund 3 was established in July 2018 and reached final capital raising in January 2020, with ZAR1.03 billion (c. $64.7 million) in investor commitments. The fund has a 10-year investment-to-exit horizon. To date, PAPE Fund Managers has deployed approximately 68% of the total commitments and anticipates concluding two further investments in the next three months, bringing to an end the Fund 3 investment programme.
Investors in PAPE Fund 3 include various South African pension funds and asset managers, a Netherlands-based development finance institution, and a pool of family offices. The fund has already concluded four investments into businesses involved in the logistics sector; the software development sector; an automotive conversion enterprise; and a company servicing the beverages industry in South Africa and across 12 African states. Entersekt is PAPE Fund 3’s fifth portfolio investment.
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