FirstRand has bought into artificial intelligence (AI) fintech firm Optasia ahead of its planned listing on the JSE.
Yesterday, FirstRand announced an agreement to acquire 20.1% of Optasia, an AI-powered fintech platform providing people across emerging markets with financial access.
The group is acquiring this strategic investment concurrent with Optasia’s initial public offering, which is in progress.
Earlier this month, Optasia announced it is proposing to undertake a primary issuance of approximately R1.3 billion ($75 million equivalent) to support growth, both organically and through future potential acquisitions and a secondary share sale from existing shareholders of at least R5 billion (approximately $300 million) by way of a private placement to qualified investors.
In addition, the Dubai-based Optasia revealed its intention, in conjunction with the offering, to list all of its issued ordinary share capital on the prime segment of the main board of the securities exchange operated by the JSE, subject to market conditions and approval by the bourse.
In a statement, FirstRand says it believes this investment in Optasia represents an “exciting opportunity to leverage a proven fintech platform that has a successful track record of solving the lending needs of underbanked or unbanked consumers, practitioners and micro enterprises which have had difficulty accessing traditional credit products”.
It notes that Optasia’s ability to pre-score customers, process micro loans at scale and use mobile data sales as a credit collection mechanism is “highly innovative and is clearly meeting the needs of millions of customers in 38 countries across Africa, the Middle East and Asia”.
The financial services firm says Optasia offers FirstRand access to new markets and new customers, which would be challenging to acquire organically and provides the group with geographic expansion opportunities in key emerging markets.
FirstRand believes that its retail and business bank FNB will be in a strong position to leverage the proprietary technology and AI capabilities of the Optasia platform to accelerate its own strategy to grow in segments in South Africa where it is underrepresented and markets in its broader Africa portfolio.
Mary Vilakazi, CEO of FirstRand, comments: “We are excited to acquire this interest in Optasia, which represents a key step in executing our growth strategy to leverage technology platforms to enhance credit capabilities and expand financial access across the continent.”
In a separate statement, Optasia says the transaction involves the sale of ordinary shares by certain existing private equity shareholders as well as Optasia’s founder.
The founder will retain his long-term commitment to the business as a non-executive director and continue as a minority shareholder, subject to the lock-up and orderly market arrangements outlined in the pre-listing statement.
Optasia reveals that the selling shareholders in the transaction include King Supreme, Waha VAS, Zoey Enterprises, BH Holdings, ADP III, Chronos and Muller Capital.
According to the company, this investment provides Optasia with the long-term commitment of a respected financial institution, bringing valuable institutional and partnership support for the company’s next phase of growth.
At the same time, it adds, it offers FirstRand exposure to the competitive advantages that have established Optasia as one of the largest and fastest-growing AI-driven fintech platforms expanding financial inclusion across emerging markets.
Salvador Anglada, Optasia CEO, says: “This significant investment by FirstRand, one of South Africa’s leading financial institutions, reflects strong confidence in Optasia’s model and in the impact we are creating.
“For over a decade, we have been driving financial inclusion across emerging markets, using AI [artificial intelligence] and data to unlock access to credit and essential financial services for millions of people.
“As we move towards our listing on the JSE, this strategic investment marks another milestone in our journey − strengthening our foundation for long-term value creation and inspiring us to keep innovating for even greater impact. We are excited to welcome FirstRand as an investor in this next chapter for Optasia.”
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