Cassava Technologies, Africa’s first ‘Big Tech’?

Not every technological breakthrough takes the form of an American-style showcase, like the recently widely-covered Apple keynote event. Sometimes, these revolutions take place within the subdued walls of a hushed conference room, on the side-lines of a professional event.

This is precisely what happened on 8 November 2022, on the second floor of the Cape Town International Convention Centre in South Africa, during the AfricaCom trade fair, the annual meeting of African digital players.

On that day, Liquid Dataport teams gathered the pan-African press around their managing director, Frenchman David Eurin. Their aim? To present Liquid Intelligent Technologies, part of the Cassava Technologies holding company, set up by Zimbabwean billionaire Strive Masiyiwa.

A pioneer of mobile telephony in Zimbabwe, where he succeeded in breaking the public monopoly in 1993, Masiyiwa is also known for having been one of the first, back in 2003, to bet on cabling the continent with terrestrial fibre optics, through the infrastructure of Liquid Telecom.

Exploiting network-produced data

In addition to cybersecurity and cloud solutions – notably through the exclusive distribution of Microsoft Azure offerings – brought together under the Liquid C2 (or Liquid Cloud) banner, Liquid Dataport intends to embody the group’s ability to take advantage of the billions of pieces of data generated by the various bits of Cassava activity.

“We are now adding a software layer to the infrastructure layer in order to monetise it more effectively,” Eurin said during his presentation. Wholly owned by Liquid Intelligent Technologies, Liquid Dataport offers online software for network control (known as software-defined networking).

Whether they are a small business or a large multinational, such as Facebook, Eutelsat, or Google, Liquid Dataport customers – initially mainly from the South African portfolio of Africa Data Centres (ADC), also a Cassava Technologies subsidiary – are offered total, personalised control over their Internet capacity, as well as their data hosting needs in the cloud and their Internet traffic routes, all via a simple application or website. Human management of these networks will be supported by a layer of artificial intelligence, especially in order to optimise routes in the event of problems.

104,000 kilometres of fibre

By the early 2020s, Liquid had laid almost 104,000 kilometres of fibre across Africa. The company, chaired by the British Nic Rudnick, has also taken stakes in a number of submarine cables, including Pakistan & East Africa Connecting Europe (Peace), which links Europe and Asia to Africa via its eastern coast.

Headed by Hardy Pemhiwa, Cassava Technologies has also expanded its data centres across the continent’s main markets via its subsidiary ADC, part of whose electricity is supplied by solar panels installed by Distributed Power Africa, another Cassava subsidiary.

We have invested $20m over the last two years in this software defined network project,

Most of the infrastructure for which Masiyiwa invested more than $1.5bn, thanks in particular to international backers, has now been built. Since 2021, Liquid Telecom, renamed Liquid Intelligent Technologies, has been working to find solutions to pay back this sum.

“We have invested $20m over the last two years in this software defined network project,” said Eurin. However, this sum seems relatively small compared with the infrastructure commitments made by his group over the last 20 years. At the same time, Cassava is supporting the development of complementary solutions to boost the use of its fibre network.

The Sasai payment application brings together a range of services, from instant messaging and video to money transfers, driver reservations and the purchase of Wi-Fi connections via Vaya Africa, another Cassava subsidiary. Sasai aims to be a ‘super app’, inspired by the Chinese WeChat model (mobile money, messaging, and e-commerce), which many African companies, such as Gozem, M-Pesa (Safaricom), MTN, and Yassir, are trying to replicate. While Cassava is not yet disclosing the number of users of the application, Google Play reports that it has been downloaded more than 500,000 times from its platform.

Advertising, fintech, cloud, energy…

From electricity supply to consumer applications, Cassava masters the entire digital value chain and caters to all types of customers, covering a wide range of professionals of all sizes to end consumers. In the third quarter of the 2022-2023 financial year, its main subsidiary, Liquid Intelligent Technologies, recorded cumulative sales of $444m, up 7.5% year-to-year, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $156m. Nearly three-quarters of its revenues came from marketing its fibre networks.

Like the major technology groups in Silicon Valley, Cassava is present in several countries, operates in different market segments, and connects economic players in so-called ‘multi-space’ markets. This is the case of Sasai, which targets a public of Internet users and connects them with content creators, service providers, and advertisers. ADC is no different, which, as we have seen, brings together companies seeking data storage and cloud providers through Liquid Cloud.

Entry barriers and serial acquisitions

The Group, however, does not meet all the criteria that often characterise big tech. Specialists define big tech as companies that are dominant in their field, serving billions of users and capable of influencing their behaviour, as well as controlling vast quantities of data.

While Cassava is present in some 30 markets, it has no specific plans to expand outside Africa – although it has been present in South America and the Middle East since the takeover of Israeli company Telrad in 2022. What’s more, it appears to be relatively new to monetising the data it holds, mainly on the behaviour of business customers.

By definition, big tech companies also stand out for their ability to build high barriers to entry into their markets, to avoid tax, to buy out numerous competitors, and to invest massively in research and development (R&D). This time around, Cassava is doing just that. The holding company has built up serious barriers to entry in the network infrastructure market, which requires heavy investment.

With Liquid Intelligent Technologies, it has also acquired or co-created eight companies in 15 years, and invested massively in innovation, raising nearly $3bn in debt and equity. As demonstrated by Liquid Dataport and the $50m it raised from C5 Capital in July 2022 to accelerate its development in cybersecurity, the company is continuing to invest in innovation. As for tax optimisation, Liquid Intelligent Technologies has an office in Mauritius, with its favourable tax regime, while the rest of its operations are located in London or on the continent.

Finally, a big tech company is defined by its sizable market capitalisation. While Cassava’s structure is based on internationally-renowned practices – a main holding company that owns the rest of the business – it is not listed on the stock market…at least for now.