By Sithembile Bopela
Optasia - Divinely visionary?
Optasia is a global fintech firm that leverages its AI-driven platform to integrate credit products into telecommunication and mobile
money ecosystems. The company helps mobile operators (like MTN or Vodacom) and mobile wallet providers (MTN Momo, VodaPay,
JazzCash, Airtel) offer nano loans that are embedded directly into the mobile services customers already use- for instance, airtime
advances or small cash advances they can borrow instantly through their phones. Optasia underwrites the customers' default risk
and provides bank guarantees, which for its partners, provides the benefit of earning incremental revenue from lending without
balance sheet exposure.
Through its fully integrated business-to-business-to-customers model (B2B2X), Optasia acts as an intermediary between fund
providers such as banks and distributors such as telco operators. Its business model covers all aspects of micro financing (MFS)
and airtime credit services (ACS), including credit scoring, financial decisioning, disbursements, and collections - ultimately
enabling partners and financial institutions to offer comprehensive financial access to underserved communities. Optasia does
this effectively and efficiently by utilising its proprietary, AI-led end-to-end technology. Optasia's credit decisioning engine utilises
thousands of "unstructured" data elements to make credit decisions that deliver strong credit outcomes when advancing airtime or
micro loans.
The company operates across 38 countries, primarily in Africa (~65% of revenue), South Asia (~15%) and the Middle East (~12%),
and processes ~32 million credit decisions daily, serving 121 million monthly active users. The group has extended more than $20
billion in small loans and credit facilities since 2016, achieved through its patented Optasia 2.0 platform which processes ~300 loan
decisions per second and handles over 1.5 billion credit decisions per month.
Background to the listing
The company is seeking to raise R1.3 billion in fresh capital on listing. The offer also includes a secondary sell-down of at least R5
billion by existing shareholders (via a private placement) to provide liquidity to meet JSE free float minimums (≥10%). Optasia itself
will not receive any proceeds from the secondary sale as the funds go directly to the selling shareholders.
The R1.3 billion in fresh capital from the listing, net of transaction costs, will be used to invest in growth opportunities across
emerging markets, support the ramp up of Optasia's higher-margin MFS business, deliver on recent traction with new customers
(e.g. M-Pesa) and expand into new geographies, notably East Africa and South Asia.
Proceeds from the listing will also be used to support technology upgrades and margin deposits for bank guarantees and strengthen
working capital to manage longer receivable cycles in MFS.
Optasia's current shareholder base includes venture capital and private equity firms Chronos Capital (33.6%), Zoey Enterprises
(Housing the interest of founder Bassim Haidar; 18.1%) and The Rohatyn Group (formerly Ethos; 14.7%) among the largest
shareholders.
There are several selling shareholders that will take part in the secondary sell down, including major shareholders Chronos Capital,
DPI, The Rohatyn Group, Waha, and Zoey Enterprises.
The market opportunity is still substantial
Approximately 52% of adults residing in Africa are still unbanked. Optasia's solution is deployed via mobile operators, and
substantially more individuals have a mobile device than a bank account. This means that Optasia can provide funding solutions to
a sizeable base that has been historically financially excluded. The sim penetration rate in Sub Saharan Africa is close to 90% and
growing - predicted to exceed 100% by 2030.
While products such as ACS on mobile devices are better established, MFS is still in its infancy and has substantial growth runway.
The global credit market continues to grow and there is significant "white space" in underbanked regions. Indeed, the proportion of
"unbanked" individuals tells only half the story, with a significant proportion of individuals that do have a bank account not having
access to credit and are regarded as "underbanked". Optasia estimates that over 1.7 billion individuals in emerging markets are
unbanked or underbanked.
Optasia estimates the total addressable market (TAM) in Sub Saharan Africa at $370 billion with ACS and MFS penetration at less
than 30% in most markets. The company also sees substansial opportunity in South East Asia and Latin America.
Growth strategy and portfolio tilt
Optasia's business has changed substantially over the last six years. In 2019, ACS constituted 99% of revenue and MFS just 1%.
By the first half of 2025, MFS had ballooned to 62% of revenue, with ACS accounting for 37%. The geographic spread has also
substantially changed. In 2019, close to 50% of Optasia's revenue was from Nigeria and 16% from South Africa. Nigeria now
accounts for 13.5% of revenue and South Africa 11%.
The growth strategy comprises of three pillars:
1. A powerful core - The business is planning to scale "what already works", driving penetration in existing geographies and
partnerships, building new partnerships within the existing footprint and increasing ticket size and product take-up in the existing
client base.
2. Future forge - Creating new business models, partnerships and financial products.
3. Borderless ambition - Selective expansion into high opportunity geographies with unmet financial needs.
Financials
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Over the last three financial years, Optasia has grown its revenue and adjusted EBITDA at a compounded annual growth rate (CAGR) of 10% and 13%, respectively.
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In its most recent half-year results, the group delivered top-line growth of 90% y/y, driven by strong growth in MFS as the offering
ramped up. Average ticket sizes are much larger in MFS as opposed to ACS (~$5.00 versus ACS ~$0.25). Management expects
revenue growth of 50% in FY25, 25% in FY26 and low- to mid-twenties growth over the medium term.
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The average "take rate" - meaning the percentage Optasia received on facilitating the loan - was 4.9% in 1H25 versus 3.5% in
FY22 and 4.0% in FY24. The take rate is much higher on MFS (~8% versus 3% on ACS), which means that the take rate will likely
improve on a blended basis as MFS growth outstrips ACS growth.
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The adjusted EBITDA margin pulled back slightly to a still healthy 45.9% in 1H25 from 47.3% in FY22 and 49.7% in FY24.
Management expects EBITDA growth of 40% in FY25, 25% in FY26 and low- to mid-twenties growth over the medium term.
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The default rate also picked up due to the change in the nature of the loans provided - MFS is inherently riskier than ACS but
remained quite low per the company's definition. The average default rate stood at 1.1% in 1H25 versus 0.6% in FY22 and 0.9%
in FY24, demonstrating the efficacy of the AI-led disbursement model. The company seems adequately provisioned at current
but will be very sensitive to default rates increasing.
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Working capital has increased substantially over the last few years as a function of growth and stood at a very high 44.7%
in FY24. Working capital includes margin deposits (cash placed with banks to secure lending guarantees), receivables (what
partners owe Optasia for fees), and payables (what Optasia owes their suppliers). Working capital is expected to stabilise at
~40% over the medium term.
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Per management, net income is anticipated to grow 45% in FY25, 40% in FY26 and in the mid-twenties over the medium term.
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In terms of dividends, the company will target a leverage ratio of 1 times EBITDA post listing. It is targeting a 20% dividend payout
ratio from FY27, ramping up to 30% over time.
Investment case
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Optasia services millions of underbanked and unbanked individuals across 38 countries giving them instant access to credit
services, while limiting over-indebtedness due to AI-driven risk profiling. It is not economical for banks to directly step into this
space since the loan disbursements are high in frequency and low in value.
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Partnerships are significant and deep. Because Optasia carries the credit risk and runs its highly effective proprietary technology
stack to effectively "run" the loan disbursement process, this makes it an attractive partner. The technology is entrenched into
the service provider's offering, which can make switching away from Optasia complex and costly.
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Geographic spread has improved notably over the years. Optasia is currently active in 38 countries across Africa, Asia, Middle East
and Europe. No single country contributes more than 20% of revenue.
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The business has a notable data advantage with multi-regional datasets that helps the group produce robust, low-latency risk
signals to make smarter, on-demand lending decisions, which keeps default risks very low even as the business grows fast.
This is complimented by Optasia Eye, a 24/7 monitoring system that tracks thousands of performance indicators across all
deployments.
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Operating expenses, outside of provisions, are very light. The service is tech-driven, which means the main investment is in AI
models not property, plant and equipment or human capital. Entering new markets costs much less for Optasia versus building
out new bank branch networks. As such, this business model supports high returns development and strong scalability.
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There is an opportunity to improve margins at a group level, as it continues to accelerate the MFS opportunity across more
markets, increasing its total addressable market and margin contribution.
Risks
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Customer concentration. Optasia relies heavily on a few big partners like MTN (Africa) and JazzCash (Pakistan) and if these
partners renegotiate contracts or switch providers, Optasia's revenue could take a big hit.
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There is a sizeable measure of competitive pressure. The market is crowded with players like JUMO, Simbrella, Kuunda, Airvantage,
and Ezra, and while we think the switching cost is high, mobile operators could use the existence of viable competitors to demand
lower fees or switch between providers.
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Currency translation and economic risk. The company operates in frontier markets (Ghana, Uganda, Pakistan, Nigeria, Benin)
where currencies can swing substantially. This can have an impact on reported revenues and any other funding/disbursement
currency mismatches.
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While operating in the grey zone between telecoms and finance means less regulatory scrutiny and compliance, regulation
could tighten resulting in additional costs and complexity attached to the product. Regulation may also be different between
geographies.
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Notable credit risk. Since Optasia underwrites first-loss default risk i.e. bears all the default risk on loans, provisions for expected
credit losses are the biggest cost item (~23% of revenue). While its technology has enabled it to maintain relatively low default
rates so far, a spike in defaults could hurt profits. That said, short loan cycles allow Optasia to stop lending quickly.
A large macro event could result in Optasia having to come to market to shore up its liquidity. Since the commencement of its
operations, however, Optasia has consistently maintained positive cash flow and has not raised any primary capital.
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There is a significant mismatch between loan collection rates for MFS (four to five months) and ACS (two to four months). Quicker
growth in MFS envisioned ahead will result in additional working capital being tied up for longer that will impact free cash flow -
particularly during the initially envisioned high growth period for MFS.
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While the company doesn't have a reported history of named, large scale acquisitions, the strategy for accelerating growth
involves a focus on future targeted acquisitions. As such, risk of making a poor acquisition exists.
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While more defensive than other areas of the market, a weak economic backdrop and pressure on discretionary spend may still
have an impact here, particularly as it relates to credit defaults and suitable applications.
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Despite the secondary sell down, free float will likely be low at the start, which could have an impact on share liquidity and price
spreads.
Valuation and SPM View
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Optasia's scale and growth trajectory in AI-driven financial services position the offer to be the largest fintech listing in South
Africa for the year, with early indications that the offer will be oversubscribed.
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The implied market cap based on the offer price range is R19.4 billion to R23.5 billion. This translates to a blended 12-month
forward PE of 16.1 times at the bottom end and 19.4 times at the top end. Given the high expected near- and medium-term
expected growth rate, we are comfortable applying at market.
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The risk embedded in this business is regarded as quite high, however, with the success of the growth strategy hinging on
leadership's ability to manage defaults, currency swings, and compliance complexities and costs.
How to apply
FNB is participating in the Optasia IPO and private placement. Please note that the minimum application amount is R10 000 in
increments of R1 000 thereafter.
FNB Stockbroking and Portfolio Management (SPM) - Log onto the FNB SPM website (shares.fnb.co.za). Navigate to My
Portfolio>Corporate Actions.
FNB Share Investing (SI) - Send an email to shareinvesting@fnb.co.za. Please indicate your account number and the rand amount
you would like to invest. Please be advised this is only available as a Share Invest product.
Please ensure funds are available. If your account is not funded the application will be cancelled.
Please note that we expect the offer to be oversubscribed. This means that you may not receive the full number of shares you
have applied for. Allocations will be made on a proportional basis. You will only pay for the shares you receive.
If you do not have a Local Trader or Share Investing account, you can open an account on the FNB App or via FNB Online Banking:
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FNB App: Navigate to 'Invest' tab > Select 'Share Portfolio' > Select 'Add'/'Open a Share Portfolio account' > Select 'Invest in
Shares & Gold' > Select 'Share Investor' or 'Local Trader' > Select 'Apply now' > Complete the steps and accept the Ts and Cs.
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FNB Online Banking: Click 'Menu' > Click 'Invest tab' > Click 'Investment Detail' > Click 'Open a Share Portfolio Account' > Click
on 'Share Investor' or 'Local Trader' tab and complete the account opening process.
Please note: For the Local Trader option on Online Banking, you will be redirected to the FNB Stockbroking and Portfolio
Management website to complete your Local Trader application. You will be logged out of FNB Online Banking and logged into the
FNB Stockbroking and Portfolio Management website. Click 'yes' to continue to complete the application process.
