Most of the up to R500 million that investment group DNI has committed to Mission Mobile is debt, the start-up’s CEO Timothy Strike told TechCentral.
Mission Mobile is a Johannesburg company that sells smartphones on repayment terms through mobile network stores. Strike said the package is “majority debt”. DNI is also taking an equity stake that makes it a “strategic minority shareholder”.
Strike would not say how big that stake is. He also would not say what targets must be met before the full amount is paid out. When the deal was announced on 21 September, the companies said the money would come from DNI’s own resources and “ring-fenced debt facilities”.
“We’re not chasing big numbers very quickly … fundamentally you’re dealing with credit risk,” Strike said. He agreed the debt was cheaper than a commercial bank would have offered. He said DNI, as a shareholder, had reason to keep rates low.
Brothers Timothy and Adam Strike started Mission Mobile in 2023. The company works inside Telkom stores. Strike said it is in “very advanced discussions” with Cell C. It has also spoken to Vodacom and MTN, but has no formal deal with either.
Its first product, called DataBack Device, is aimed at prepaid customers who cannot get or afford a contract. The customer pays 15% to 25% of the phone’s price upfront. The rest is paid over 12 to 18 months.
Each repayment unlocks a discounted data bundle from the network. At the moment the discount is 20% off a 3GB plus 3GB bundle. Strike said a cashback reward on airtime recharges is being developed.
Prepaid makes up 82% of South Africa’s 117 million mobile subscriptions, according to Icasa’s latest State of the ICT Sector report. Icasa warned that the figure may be too high, because some operators count any Sim not cut off within 90 days.
Strike said Mission Mobile carries all the credit risk, not the networks. He said phones are priced in dollars, the rand weakens, and contracts have stretched to 36 and 48 months. “The network is in the business of building networks and Sim cards and voice and data,” he said.
In return, the network gets a Sim that stays in use. In a dual Sim phone, the operator’s Sim is locked to one slot. The phone itself is not locked to a network, so customers can keep another Sim in the second slot.
The phones run device management software that lets Mission Mobile lock a handset if payments stop. Strike said there are grace periods, so “it’s not like an immediate lock”. The software is removed once the phone is paid off.
Strike said bad debts of 15% to 20% are “typically a healthy range for this market”. He agreed this is “way above” what a bank would accept. The company also checks customers with Beam, a tool the brothers built that reads bank statements customers agree to share.
Mission Mobile is not registered as a credit provider. Strike said it falls “outside the ambit” of the National Credit Act because its product is “more of a rental model”. Customers who can no longer pay are encouraged to return the phone and are then released from the deal.
Andrew Dunn founded DNI as a distributor of Sim cards through informal traders. Former Discovery Health CEO Ryan Noach became CEO in March 2024. The group says it earns more than R12 billion a year and operates in more than 35 countries.
In August, a DNI-led group took new shares in Frogfoot, Vox and Hypa in a deal that valued the businesses at R14.4 billion. Business Times reported that DNI has committed R2.1 billion across its recent deals.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.