Zafin Labs Americas Inc., a Toronto-based provider of artificial intelligence software for financial institutions, has completed its first major acquisition since being acquired by a Swedish private equity firm earlier this year. The company announced Monday that it had agreed to purchase Naehas Inc., a Palo Alto, California-based firm with approximately 250 employees and an annual revenue ranging from US$30 million to US$50 million. The purchase price was not disclosed but was reported to be a nine-figure sum in U.S. dollars.
Naehas specializes in software that enables banks to deliver digital, personalized marketing offers to customers while ensuring compliance with regulatory requirements. The acquisition is expected to complement Zafin’s existing product portfolio by adding a “fourth pillar” to its strategy, significantly broadening its addressable market, according to Zafin CEO Charbel Safadi. After the transaction closes, Zafin will reportedly serve 16 of the top 20 banks in the United States.
The deal was financed through a combination of cash, partially drawn against Zafin’s line of credit, and equity. Founded in 2002, Zafin was regarded as a quietly successful software provider to financial services companies before Nordic Capital, a Stockholm-based private equity firm, acquired a majority stake early in 2024, valuing the company at over US$500 million. Mr. Safadi joined Zafin as president in 2023 and became CEO following the Nordic takeover, succeeding co-founder Al Karim Somji. Other co-founders remain with the company in leadership roles.
Zafin’s platform leverages AI-enhanced cloud software to help banks streamline complex systems, enabling automation of customer-focused processes such as personalized cash-back offers and promotional incentives. Its clients include major global banks such as ING Groep NV, Barclays PLC, and HSBC, as well as Canadian institutions like the Canadian Imperial Bank of Commerce.
In recent years, Zafin has emphasized the responsible deployment of AI technologies by regulated financial institutions. The company introduced AIOS, a tool designed to govern and document AI workflows and decision-making processes, supporting compliance and transparency for senior management and regulators. Zafin also integrates AI into its internal operations and recently expanded its AI engineering team by 70 specialists, growing its overall workforce to more than 1,000 employees, excluding the Naehas personnel. The company serves as an initial user of the autonomous AI agents it develops before offering them to clients.
Since the Nordic acquisition, Zafin has more than doubled its sales and aims to reach US$200 million in annual recurring revenue by year-end. The firm generates over half its revenues from the U.S. market, with additional income from Canada, South Africa, Australia, the United Arab Emirates, the U.K., and parts of Europe. It reports operating profit margins exceeding 20%, achieving a combined growth and profitability measure known as the “rule of 40” at over 50%, placing it among the top-performing subscription software companies.
Looking ahead, Mr. Safadi indicated that Zafin may pursue one to three smaller acquisitions within the next year but will primarily focus on organic growth through expanding sales of its existing software offerings.