‘We’ve done the heavy lifting,’ says Cassava Technologies’ Hardy Pemhiwa

In depth
This article is part of the dossier: Top 50 tech champions

By Nicholas Norbrook
Posted on Friday, 8 April 2022 18:50, updated on Wednesday, 4 May 2022 16:52

For Liquid Intelligent Technologies (#167), the pandemic has produced yet another example of Africa leapfrogging. “We saw a five-times increase in data throughput,” says Hardy Pemhiwa, the chief executive of Liquid’s holding company, Cassava Technologies, recalling the huge demands suddenly placed on its vast fibre-optic network on the continent in 2020. Many companies were forced to digitalise to survive.

This is part 9 of an 11-part series.

Cassava Technologies was created to house the new ambitions of Strive Masiyiwa, the Zimbabwean founder of Econet Wireless and elder statesman of African tech. Masiyiwa now wants to “create a digitally connected future that leaves no African behind”, Pemhiwa says. Cassava separates Econet Wireless from the digital infrastructure and digital services business – essentially the fibre network, cloud services and data centres.

The Econet Wireless ecosystem, comprising the mobile-money business in Zimbabwe and mobile-phone networks in Zimbabwe, Burundi, Lesotho and Botswana, produces around $250m of annual earnings before deductions, says Pemhiwa. “And that is really because of exchange rates –otherwise, that is easily half a billion dollars in earnings before interest, taxes, depreciation and amortisation,” he adds.

He estimates Cassava Technologies to be “a circa $800m-revenue business”. That is enough to get plenty of investors knocking at its door. In December, Cassava was in talks with an outfit run by US tech investor Betsy Cohen, whose proposition valued Cassava at $4bn.

While some African start-ups are under pressure to sell out early – sparking a debate on Africa’s tech sovereignty –, Cassava is in a position to pick and choose its partners. On the capital side, “we have long-only investors”, Pemhiwa says, which include development finance institutions like the UK’s British International Investment and the World Bank’s International Finance Corporation. For the rest, strategic partners, such as Mitsui for data centres and Google for low-cost internet, help Cassava to meet its goals.

The super-app challenge

“Africa has never really had a technology business on a global scale,” says Pemhiwa. “We’ve invested $2bn in building the Cassava Technologies ecosystem. Our fibre broadband network is today over 100,000km, from Cape Town to Cairo, from Port Sudan to Lagos, from Dar es Salaam to Manda on the west coast of the DRC […], and 300 towns and cities in between. And we’ve had to power all of it. We’ve already done the heavy lifting.”

Having built the network, Cassava now wants to create more demand for it. The group’s original pivot into media was unsuccessful, with Econet’s Kwesé TV shuttered in 2019. “I think the thesis still holds,” says Pemhiwa. “The production and consumption of African content is a nascent and growing opportunity.” He points to the “5,000 hours of video” that are being uploaded to Cassava’s ‘super-app’, Sasai – an attempt to emulate the Chinese behemoth Tencent’s WeChat app, which brings together entertainment, payment platforms and messaging.

Beyond the simple mobile-money services, a variety of platforms can be built, says Pemhiwa. One trial just concluded in Togo allows tractors to be connected with farmers. This ‘Uber for farm machinery’ model is already out there – but, with Sasai, “the owner knows they are going to be paid because it is intermediated by a trusted third party. The government is happy because there is real transformation of the agricultural sector,” says Pemhiwa.

Sasai’s uptake has not been rapid, however – user downloads from the Google Play Store number a few hundred thousand, which is a far cry from WeChat’s one billion users. It faces competition from other operators like MTN that have also launched super-apps. A Cassava representative says: “Customers on the super-app are minimal; the app will be commercialised over the course of the coming year.”

Inclusion equation

Cassava also wants to use the app to drive digital inclusion: “We’re going into these villages and saying: ‘How do we make sure that we bring that school, that clinic, these kids, the farmers into the economic value chain so that we can drive economic transformation?’” He concedes that the motivation is not just altruism: “If those people become economically empowered, they will consume a lot more of our services, and that way we have an inbuilt sustainability engine.”

He continues: “If you think about a country as large as the DRC, Lubumbashi had never been connected to Kinshasa before we finished that link. […] We are running a cable all the way from the border with Rwanda, through Kinshasa to the west coast. And you can imagine the transformation that happens, because it’s now proven, right?” Research shows that access to the internet boosts per capita GDP.

Keeping it continental

Pan out to 35,000 feet, and the continent needs exactly that kind of digital integration – not just between economic actors in a village, but between African countries. This is one of the reasons why the African Continental Free Trade Area (AfCFTA) was created.

“People forget that when we started to build cross-­border fibre, 95% of Africa’s voice traffic was switched [in] Europe,” says Pemhiwa. “So, literally, somebody sitting in Nairobi who was making a call to their counterpart in Kampala, that call was switched in Greenwich in the UK before it came back. When I’ve met with those policy­makers, I’ve said to them: ‘We built the enabling infrastructure for you before you had the political will to do [the AfCFTA].’”

Pemhiwa considers Cassava Technologies to be a key chapter in the story of African economic integration, “because today we can manage somebody’s digital presence sited in a network operation centre in Jo’burg, and we can see that network all the way to Kinshasa [or] to Juba.”

As a result, Cassava is attracting global corporations that need to work across multiple African countries, particularly for its cloud services. “Anybody that has core location of their infrastructure in various data centres would be looking for a seamless interconnect that is open access,” says Pemhiwa, pointing to airlines as an example.

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