Tuesday 18th December saw the landmark listing of Cassava Smartech Zimbabwe Limited (CSZL) on the Zimbabwe Stock Exchange (ZSE). Cassava Smartech closed the day at a price of $1.49 per share, translating to a market capitalisation of $3.88 billion. This is a record. The largest public listing in Zimbabwean history. It is also the first listing on the ZSE in 3 years.
The numbers are impressive
An Investec Bank of South Africa report has valued the company at $6 billion. In addition, African Alliance, a Kenyan based market research firm had predicted that Cassava Smartech would trade over $3.2 billion in a paper published last week. On the ground, Founder of the Econet empire, Strive Masiyiwa was undoubtedly upbeat. During the course of trading, he posted on Facebook saying, “Trading has started! Shares are already $1.90/ share. This values the company at $4.9 bn. What more can I say? We give glory to our God.” At the end of trading, Masiyiwa dissected the actual numbers. “The top three counters in order of market capitalisation are as follows:
- Cassava – $3.88 billion
- Econet – $3.78 billion
- Delta – $3.62 billion
Cassava and Econet at a combined market capitalisation of $7.66 billion, this represents about 40% of the ZSE total market capitalisation,” he said. It should be borne in mind that before the demerger, Econet was valued at $6.3 billion. The writing is on the wall, value is being unlocked.
The God factor
It is not a coincidence that 95 year old Archbishop Ezekiel Guti and his wife Pastor Eunor Guti were the guests of honour and rang the bell to signal the start of trading at the listing. The Econet empire has always had a touch of God inculcated all over their business. It is said that employees at Econet start the day with a prayer daily before they start work. 20 years ago, when Econet first listed on the ZSE, Strive Masiyiwa was accompanied by Pastors who prayed over the occasion. Group Chief Executive Officer of Econet Global Limited Hardy Pemhiwa summed it up saying, “ Today Econet achieved another milestone by listing Cassava Smartech Zimbabwe on the Zimbabwe Stock Exchange with an opening market cap of $3.9 bn. This is the first demerger and listing of a fintech subsidiary by any mobile operator in the world! Praise be to God.”
Who is Cassava Smartech Zimbabwe Limited?
Cassava Smartech was formed when Econet Wireless Zimbabwe splitted its empire into two parts: Econet Wireless Zimbabwe Limited (the telecommunications business), and Cassava Smartech Zimbabwe Limited (the financial technology business). According to Chief Executive Officer Eddie Chibi, Cassava “runs a balanced portfolio of distinct, yet synergistic businesses translating into an integrated business model.” After the recent demerger, Cassava Smartech now holds 100% of Ecocash, 100% of Steward Bank, 85% of Econet Life Private Limited and 90% of Econet Insurance Private Limited. Their key strategic pillars or the smaller pieces of the business are finTech (Ecocash and Steward Bank), InsurTech (Ecosure and Moovah Auto Insurance), on demand services (Technites and Vaya Ride App), ecommerce (Ownai online market place), healthTech (Maisha Medik), eduTech (Ruzivo and Akello eBooks) and agriTech (Ecofarmer). Mr Chibi is already looking into the future. He says, “ We will go into blockchain technology and AI to continue embracing technology in our solutions.”
At the moment, it is evident that Cassava Smartech’s performance is anchored on Ecocash, Steward Bank and Ecosure. Ecocash alone enjoys a 97% market share in the mobile money market in Zimbabwe. Steward Bank is believed to have more customers than all the other banks combined. As if that is not enough, Ecosure is the largest insurance company in Zimbabwe in terms of number of policies. If the current momentum is to be maintained, the growth of Cassava Smartech is not in doubt. In terms of on demand services, Vaya Ride, an Uber look alike, has potential to take advantage of the opportunity that exists in the business as 2 million Zimbabwean commute daily. If they exploit a share of this market, they are off the ground. Strive Masiyiwa has already hinted on a new Education insurance product launching in January. And there are many more eggs in the hatchery.
The amount of work put into Cassava Smartech are notable from a distance. This is a company is on its way up. The numbers are impressive. Strive Masiyiwa is happy, so are the shareholders.