Rwanda-based entrepreneur David Winkelmann shares insight in to the reality…
EcoCash is a mobile phone-based money transfer service that was launched in 2011 by Econet Wireless – business maverick Strive Masiyiwa’s billion-dollar company for customers in Zimbabwe.
EcoCash gives users a 24-hour option to deposit, withdraw, transfer money and pay for goods and services, including electricity from a mobile handset. Driven largely by favourable circumstances in the last nine years, Ecocash’s growth has been largely determined by circumstantial market forces, changing public perception and convenience. Once they figured out a distribution model that saw thousands of young people finding careers as Ecocash transfer handlers and credit resellers, it was inevitable that it would become the market leader in mobile money in Zimbabwe.
Today, it controls over 99 percent of the mobile money market in Zimbabwe, presenting untapped opportunities for the discerning entrepreneur and the savvy investor.
With this strong user base that is largely dependent on Ecocash to pay for fees, transact in stores, electricity, DSTV subscriptions and even taxi fares, it was clear that Econet Wireless, the telecommunications business that Strive began 26 years ago, provided the perfect backdrop to this technology company’s wildest dreams.
And so it was not a surprise when Cassava Smartech was born. It was simply an inevitability.
Cassava Smartech was formed when Econet Wireless Zimbabwe split its empire into two parts: Econet Wireless Zimbabwe Limited (the telecommunications business), and Cassava Smartech Zimbabwe Limited (the financial technology business).
Under Cassava are smaller subsidiaries of companies from key sectors of the economy; including transport, agriculture, education, health and payments – and Econet has created technology for each of these sectors. Their structure is very similar to Tencent, the Chinese multinational investment holding conglomerate that was founded in 1998, five years after the launch of Econet. Like Cassava, it also has subsidiaries that specialise in various internet-focused products in China and across the world. Tencent has key investments in Ola, a ride hailing app in India and Didi Chuxing – the world’s largest ride hailing platform.
On Tuesday 18th December 2018, Cassava listed on the Zimbabwean Stock Exchange. Trading opened at 0.43 cents and closed at 149 cents, a 241% growth in a day that valued the company at $3.8 billion. This is Zimbabwe Stock Exchange’s first listing in three years and a record as the largest listing in the history of Zimbabwe.
Today, Cassava’s market value is larger than that of its parent company, Econet Wireless. Combined, they have a market value worth over $7.8 billion.
In December, while speaking at an event to mark the company’s listing, chief executive Edmore Chibi said the unbundling of the companies would unlock value and allow a specialized focus on financial technology opportunities.
As a result, Cassava Smartech holds 100% of Ecocash, and 100% of Steward Bank (one of Zimbabwe’s fast-growing digital innovative banks), among a large ownership of other subsidiaries as well.
Similar to Tencent and Google, Cassava has invested in key strategic sectors. They are in the business of how people pay for services, how people move from one location to another, how people learn, and how people farm in this day and age. They are also in the business of how people connect to the internet:
Ecocash – Payments & Mobile Money
Ecocash is led by Natalie Payida Jabangwe, one of the youngest and undoubtedly most successful Chief Executive Officers of a mobile money company in Africa. An Imperial College graduate and engineer, she was part of the initial team that worked on the strategy for the company. Under her leadership, Ecocash has grown to become the largest payment provider of choice.
To understand how Ecocash grew so rapidly, one has to consider the economic background in which the company flourished. Due to the financial challenges that the Zimbabwean economy has gone through in terms of liquidity and access to hard currency in the past 15 years, the Ecocash team has pressed forward with a digital first agenda from the beginning. As a result, cash shortages have made it the de facto medium of choice in daily transaction. Today, Zimbabwe is a digital first economy where old and young, the rural and urban communities all know how to use Ecocash.
In November 2017, Ecocash’s transaction values accounted for about 53% of Zimbabwe’s Gross Domestic Product. Jabangwe was also recently appointed as the Interim CEO of Ecosure, which is the insurance division of Cassava. Recently, Ecosure Rescue Services launched an ambulance hire service.
Vaya – Transport
Similar to Uber and the recently renamed service Bolt (previously known as Taxify), Vaya is an on-demand ride hailing solution that was launched late last year. It connects drivers to people needing a ride from point a to b. People can also use the service to deliver products. Vaya has been slammed by urbanites for being costly, however this is viewed largely through the lens of the high fuel prices that generally contribute to instability in the transportation sector. Vaya is a viable option for the tourist visiting Zimbabwe or a busy executive on the move. There is a clear opportunity, as over two million Zimbabweans commute daily. It also has an option to book a ride ahead of time, and this is the best option as it gives the customer time to get ready while a driver makes their way to the pickup location. There are more customers than drivers using Vaya at this point, and this low uptake can once again be attributed to the high cost of fuel.
Ruzivo Learning – Education
Traditionally, Zimbabweans and education are inseparable, and that is why Ruzivo is one of Cassava’s most popular products; with over 1.5 million children using the service across 24 different subjects, both primary and high school alike. There are over 20,000 teachers on the site that deliver knowledge in a blended learning format. Ruzivo is a Shona word that means ‘knowledge’. All the content is aligned to the national school curricula, and offered in conjunction with Ministries of Education in different countries. Digital assessments provide insight into a child’s performance as they learn, which is a game changer from the classroom method. Learning can be personalised as well. It is basically a classroom on demand.
Through Ruzivo, teachers in Zimbabwe now have the opportunity to reinvent themselves and become educators in the 21st century who can educate students to be successful in a complex, interconnected world. Through its rich digital content aligned to the Zimbabwean curricula, Ruzivo is allowing teachers in remote parts of Zimbabwe to peg themselves against school teachers in urban areas.
mAgric – Agriculture and Smart Farming
In the agricultural sector, under the Ecofarmer brand, sits mAgric. It is an end-to-end solution for the smallholder farmer. It offers a wide range of tailored services under financial services, information, trading and logistics. This has created a powerful agricultural ecosystem that gives farmers access to a smart farmer club card. They can make micro savings, and insure their livestock. With mAgric, farmers can also dial a tractor when they need one, and dial an agriculture officer who are an important part of agriculture in Zimbabwe as they provide support for new farmers.
Visit Cassava SmartTech/AgriTech
Steward Bank Limited – Digital Banking Services
Steward Bank is one of the most capitalised and liquid banks in Zimbabwe, largely due to its parent company, Econet Wireless. Established just over five years ago in 2013, the bank has grown to become one of the country’s most loved digital banks. It has innovative solutions for small to medium businesses via their POS system ‘Kwenga’, and remains a key and integral part of the diaspora remittance option due to its multiple partners facilitating transfers.
While speaking at Seamless West Africa in October 2018, Steward Bank CEO Dr Lance Mambondiani emphasised that even though there are only eight branches that service Zimbabwe with no plans to add more, financial inclusion is at the heart of their mandate. One can open a bank account with Steward simply by dialling a USSD code. Through the same method, subscribers are also able to borrow small amounts of money that they can divert to fees and ancillary costs by supplying very minimum requirements. This is another game changer for the bank as they have effectively become a micro finance institution. With over seven million Ecocash users at their disposal, they have a ready and prime market to serve.
In March 2019, under Dr Lance’s leadership, the bank launched ‘Sosholoza’ – a service that works with the use of Whatsapp. A customer can transfer money by instructing a bot to make transactions on their behalf. It also includes a virtual assistant, plus the ability to open an account, pay for bills and move money seamlessly across different mediums. The options are from bank to wallet, from bank to bank and any mobile wallet in Zimbabwe, including their competitors OneMoney- owned and managed by the Government of Zimbabwe and Telecel, which runs Telecash. This is a crucial and historic step for interoperability in Zimbabwe.
Visit Steward Bank
It’s evident that Cassava Smartech’s current performance is anchored on Ecocash, Steward Bank and its subsidiary companies. 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. And to top it off, Liquid Telecom, another subsidiary company, is the largest operator of fibre and business satellite services on the African continent. Currently, the company is on a Cape to Cairo mission to connect Africa. Over the past few years, it has been growing rapidly, fueled by the demand for infrastructure to support broadband internet in Africa. It has so far built a fibre optic network that spans 15 countries from South Africa all the way to South Sudan. fueled Now with growth this huge, impossible is surely nothing.