FirstRand Group is making a significant move in the fintech space, committing a substantial R4.7-billion to acquire a 20.1% stake in the multinational fintech company, Optasia. This investment comes just as Optasia gears up for its highly anticipated listing on the Johannesburg Stock Exchange (JSE), with a potential valuation exceeding R20-billion.
According to Optasia CEO Salvador Anglada, this investment from FirstRand signifies a strong belief in Optasia's innovative business model. Optasia specializes in credit-vetting within emerging markets, utilizing sophisticated AI algorithms to determine microloan amounts for customers. The company partners with prominent fintech platforms like MTN Group's MoMo and Vodacom Group's M-Pesa, leveraging licensed banks' balance sheets to distribute funds and underwriting potential defaults.
Optasia's IPO plans were revealed earlier this month, with the company aiming to raise up to R1.3-billion through the sale of ordinary shares. Existing shareholders also plan to sell approximately R5-billion in secondary shares, proceeds from which will not directly benefit Optasia.
The funds raised through the IPO will be strategically deployed for expansion into new and promising markets, including East Asia, Kenya, Egypt, and Indonesia. This expansion strategy will involve both organic growth initiatives and potential strategic acquisitions, further solidifying Optasia's position in the fintech landscape.
Key Details of the IPO
Optasia's pre-listing statement outlined plans to offer up to 84 million ordinary shares, priced between R15.50 and R19 per share. A company representative indicated that this pricing would place Optasia's valuation between R19.4-billion and R23.5-billion upon its JSE debut, assuming the shares are neither oversubscribed nor undersubscribed.
FirstRand's Confidence
FirstRand's investment, made at the higher end of the pricing scale (R19/share), underscores the financial services giant's confidence in Optasia's future prospects. FirstRand's extensive portfolio includes well-known brands like FNB, Rand Merchant Bank, WesBank, and DirectAxis. Optasia has clarified that FirstRand's investment will not alter the size of the initial public offering.
- FirstRand invests R4.7 billion in Optasia.
- Optasia plans JSE listing with R20+ billion valuation.
- Funds to be used for expansion into new markets.