Cassava SmarTech Zimbabwe (ZSE:CSZL) made history on 18 December 2018 when it debuted in the market at a price of $1,50 per share, valuing the company at $3,8bn. It immediately became Zimbabwe’s third most valuable company after Delta and Econet Wireless (ZSE:ECO) (its now telecoms only, sister company).
By any measure this is easily the largest public listing in Zimbabwe’s history, and the first listing in three years. It will go a long way in helping pension funds in particular recover losses caused by high inflation in the country.
In splitting Econet’s listing into two separate listed companies, the value has gone up from $3,2bn to $7,6bn in less than three months. This has achieved the stated objective of Econet founder Strive Masiyiwa, who said it was designed to “unlock” the value of the business.
Several international research analysts had already predicted that Cassava would command high valuations because of the nature of its businesses. African Alliance a Kenyan based market research firm predicted that Cassava would trade over $3,2bn, in a research paper published last week, while a new report by Investec Bank Of South Africa, valued the company at almost $6bn.
Cassava Smartech is essentially a technology platforms business, that uses the mobile network to deliver services in almost every sector of the economy including financial services, health, agriculture, media, transport and logistics, and education.
The most popular services are EcoCash, and EcoSure, which have become mainstays of financial services (Fintechs). Both Investec and African Alliance pointed out in their reports that Cassava should be seen as one of the most successful Fintech platforms primarily because of EcoCash and EcoSure. Its banking unit Steward Bank is not a traditional bank, as its revenues are driven by the embedded role it provides in supporting EcoCash. It has more customers than all the banks put together.
The biggest push by Cassava at the moment is in transport and logistics, where its Vaya brand is set to be Zimbabwe’s own “Uber”. Zimbabwe has more than 2 million people commuting daily, and if Vaya can capture a slice of that market, then Vaya is going to be huge, creating another platform to increase valuation.
The Deputy Governor of the Reserve Bank Dr Jesimen Tarisai Chipika represented the Governor and spoke glowingly about Zimbabwe’s huge strides in financial inclusion, due in great part to Cassava’s support of government policies. Zimbabwe is now the country in Africa with the highest cashless transactions.