About Lesaka Technologies

Lesaka Technologies, Inc. provides financial technology, or fintech, products and services, primarily in South Africa and neighboring countries, to unbanked and underbanked consumers, and fintech solutions for merchants operating in formal and informal markets. The company provides cash management and digitization services and card acquiring to merchants, and has developed and provides secure transaction technology solutions and services, as well as offers transaction processing, including bill payment and value-added services (including prepaid airtime and electricity products) and financial solutions to its customers. The company is building a dual-sided financial ecosystem offering banking, lending and insurance to consumers, and cash, card, capital, payment and value added services (VAS) solutions to micro, small and medium enterprises (MSMEs). The company’s dual-sided financial ecosystem has two overlapping segments: Merchants and Consumers. Customers—In the company’s B2C Consumer segment, the company’s focus is on the lower end of the market that has traditionally been under-banked. The company’s products are designed for consumers within Living Standards Measures (LSMs) 1 to 6, which comprises approximately 26 million people. The company has over 1.1 million active customers who are predominantly recipients of social grants offered by the South African Government. In the company’s B2B Merchant segment, the company recently completed the acquisition of the Connect Group during the year ended June 30, 2022, which significantly advanced its vision and is truly transformational for the company. The acquisition adds significant scale to the company’s existing B2B offering, which mainly services formal merchants, bringing over 51,000 MSMEs into the Merchant business segment. Through the introduction of a suite of solutions and technologies targeted at the MSME merchant sector where the company was previously under-represented, the company can address the needs of approximately 1.4 million informal and approximately 700,000 formal MSMEs in South Africa. The informal sector merchants are generally smaller and operate in rural areas or in informal urban areas and do not have access to traditional banking products. The formal merchants are generally in urban areas, have larger turnovers and have ready access to multiple service providers. The company operates separate brands in these two sectors of the economy. Products— The company offers a comprehensive set of products and services to its consumer and merchant customers. In the company’s Consumer segment, the company’s products include transactional banking, short-term loans, a digital wallet, as well as insurance and various VAS to consumers underserved in South Africa, aligning with the company’s purpose of improving people’s lives and increasing financial inclusion. The company’s value proposition and products are designed to be simple, relevant and cost effective for the company’s target market. In the company’s Merchant segment, to the MSME customers, the company offers cash management and digitization, card acquiring, growth capital, VAS and bill and supplier payments. At a larger enterprise level, the company offers bill and supplier payments and VAS through the company’s proprietary financial switch, as well as point of sale devices and maintenance, bank and SIM card production and other specialized technology products. Health and Safety Laws and Regulations The company is subject to various South African laws and regulations that regulate the health and safety of its South African-based workforce, including those laws monitored by the South African Department of Employment and Labour, which stipulates the legal framework within which the company needs to function. This framework comprises the Occupational Health and Safety Act, Act 85 of 1993 (OHSA); the Compensation for Occupational Injuries and Diseases Act, Act 130 of 1993 (COIDA); the Basic Conditions of Employment Act, Act 75 of 1997 (BCEA); and the Labour Relations Act, Act 66 of 1995 (LRA). Compliance with COVID-19 regulations remains regulated by the National Institute of Occupational Health (NIOH), and the Occupational Health Surveillance System (OHSS), the Centre for Scientific Industrial Research (CSIR) and the National Institute for Communicable Diseases (NICD). Research and Development During the year ended June 30, 2022, the company incurred research and development expenditures of $0.5 million. Competition The company does have competitors in parts of its ecosystem. For consumers, there are a number of traditional and digital providers of low-cost transactional bank accounts and micro financial services. These include the large South African banks, such as FNB, Standard Bank, Absa, Nedbank, African Bank and Capitec; the South African Post Office; and digital banks, such as Tyme Bank and Bank Zero. In the South African ATM network market, the company competes against the South African banks, ATM Solutions and Spark ATM Systems. In card acquiring, competitors include Yoco, iKhokha, Sureswipe and the South African banks; in VAS and bill payments, they include Flash, Blue Label, Shop2Shop, Pay@ and Ukeshe; in lending, they include Lulalend, Merchant Capital, Retail Capital and the South African banks; and in cash management, they include Fidelity, G4S, Cashnet and the South African banks. At an enterprise level, the company’s financial switch and VAS and bill payments business competes with BankservAfrica, Pay@, eCentric and Transaction Junction. History The company was incorporated in Florida in 1997. It was formerly known as Net 1 UEPS Technologies, Inc. and changed its name to Lesaka Technologies, Inc. in May 2022.