Optasia has acquired electricity credit specialist company Finergi for nearly R500m.
The JSE-listed fintech operator said it has agreed to acquire the entire issued share capital of Finergi Global for $30m (R497.6m).
Based in Dubai, Finergi is described as a technology company providing “real-time credit access through prepaid electricity systems”.
In essence, the company’s tech allows people to buy electricity on credit with prepaid meters functioning as digital wallets. Customers can access credit via a mobile request, with amounts paid back when the next electricity top-up purchase is made.
This system works in a similar fashion to the airtime lending that is core to Optasia’s business, which helps to explain its attractiveness and strategic value to the latter.
Purchase consideration for the deal comprises $24.9m in cash consideration and 4,337,982 ordinary shares in Optasia to the value of $5.1m. Tied to this is a contingent earn-out payment of $10m payable upon Finergi meeting certain defined performance milestones.
According to Optasia, which listed on the JSE in November, Finergi provides a “unique entry to energy-distribution ecosystems” that complement its platform while supporting its planned expansion into related businesses and “enabling partner and product diversification”.
In addition, Finergi will provide Optasia “with access to direct KYC capabilities and on-the-ground identity data, enabling strengthened risk infrastructure and underwriting accuracy”.
Optasia describes itself as “an AI-enabled fintech platform that provides microfinancing solutions and airtime credit solutions”. The company is essentially in the business of microlending across various platforms.
Founded in December 2012, it has developed a network of distribution partners, including mobile network operators and financial institutions. It has access to more than 860-million mobile subscribers.
By end-June, Optasia operated through a network of 49 distribution partners and 13 financial institutions.
Optasia group CEO Salvador Anglada said, “The acquisition materially accelerates Optasia’s strategic plan by enhancing its capabilities and ecosystem reach. Finergi’s intellectual property rights position it as a first mover in utilities credit, creating a high-margin, direct-to-consumer platform with multiple cross-sell opportunities.”
He said Finergi is uniquely positioned to capitalise on the opportunity created by Mission 300, the global initiative to expand access to electricity for 300-million people by 2030 through prepaid and smart-meter solutions.
“The acquisition is expected to enable access to new markets and strategic partnerships while providing Finergi with the tools to accelerate its growth trajectory,” said Anglada.
This comes as the group, in which FirstRand recently took a significant minority stake, said it had exceeded the guidance given at its IPO.
Revenue for the year to end-December increased 76% to $265.4m, while adjusted earnings before interest, tax, depreciation and amortisation (ebitda) grew 52% to $114.5m. HEPS increased 9% to 3.38c.
Optasia is the company behind the airtime lending businesses of mobile operators Vodacom and MTN. It also lists India’s Airtel, Pakistan’s Jazz and Indonesia’s Indosat Ooredoo Hutchison as mobile networks that are part of its partner network.
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