Five years after spinning off EcoCash, Econet Wireless is bringing the successful mobile money business back into the group.
EcoCash’s mobile money business, the on-demand service VAYA Technologies, Econet Insurance, Econet Life, MARS Zimbabwe and Maisha Health will now come under Econet Wireless. In exchange, EcoCash will get Econet shares for distribution to its shareholders.
“The envisaged Scheme of Reconstruction will not result in the delisting of EcoCash Holdings Zimbabwe Limited or Econet Wireless Zimbabwe Limited,” Econet says in a notice.
Encouraged by the success of the mobile money arm, Econet in 2018 spun-off and listed the business under a new unit, Cassava Smartech, which also included Steward Bank. At the time of the listing, in EcoCash accounted for 41% of Econet’s revenue, and was Econet’s fastest growing revenue source.
The listed entity was rebranded to EcoCash Holdings in 2021, to avoid confusion with other separate Cassava-branded companies in the Econet Global group and to reflect the dominance of EcoCash in the unit.
What this means
After the transaction, Steward Bank will remain the only subsidiary of EcoCash Holdings, which may suggest the need for rebranding in the near future. According to EcoCash Holding’s last interim results for the August half-year, the mobile money business made up 43% of revenue for the company. EcoCash mobile money and Steward bank made up the fintech unit, which together accounted for 76% of revenue.
The insuretech business, which includes short-term insurer Moovah plus funeral cover EcoSure, accounted for 20% of revenue. These subsidiaries are tied to the mobile money business, which explains why they are moving together to Econet. In the half-year to August, the short term insurance unit grew USD-denominated business by 37% while life grew by 168%.
In the third quarter to November, EcoCash managed to grow its USD wallet services six-fold.