Illustrative Image: Skyscraper | Construction (Image: Freepik) | Prosus logo | Lesaka logo (Image: Wikicommons) 
The dust is starting to settle on the Optasia listing. Having been listed on the JSE for almost a week, the share price opened at around R20.50 and dipped to R19 (the top of the initial public offering, or IPO, pricing range) before stabilising at roughly R19.50. Not quite fireworks, but certainly not a bad outcome.
Of course, platform businesses aren’t entirely unfamiliar to South African investors. After all, the Prosus/Naspers combo is the most important group we have on the JSE, having created incredible wealth for investors thanks to the underpinnings of Tencent in China and the international portfolio of businesses that has been built off the back of that value.
The beauty of investing is that you can pick where you want to play in the life cycle of these businesses. For those with higher risk tolerance, there are earlier-stage companies that need to raise cash from shareholders to execute their strategies. For those who are more risk-averse, the established names are seen as a safer bet thanks to their strong balance sheets.
These perceptions aren’t always grounded in fact. A very successful platform business at an inflated valuation is still a risky investment, as an unwind in the valuation can lead to ugly returns despite the underlying company being excellent. An early-stage company at an appealing price can be very attractive, even if there will be some bumps in the road along the way. As is always the case in investing, your returns will be a function of what you bought and what you paid for it.
With Prosus/Naspers as a terrific example of the size of the prize, it’s worth understanding more about what the capital allocation decisions look like at that scale. We can then dive into Lesaka Technologies as a useful local example of a company at a much earlier stage in the journey of building a strong regional platform.
These are exciting times in our market.
Prosus: so much cash, but what to do with it?
If a business becomes really big, then cash is no longer a problem. There are many examples of these technology businesses in the US market, ranging from the Magnificent Seven giants like Apple and Meta through to “smaller” technology plays that are still massive by any rational standard. Locally, the only company that comes close to being in this position is Prosus.
Just to get it out of the way, I’m only going to refer to Prosus instead of Prosus/Naspers. It’s clear that the group is focusing on the Prosus brand, and so I tend to do the same. That focus is apparent in the share price, with Prosus up by 61% year-to-date, while Naspers is up by 48%. There’s no chance that the modest underlying difference in assets can explain the difference — it’s really about the storytelling on the global market, with all the energy being put into the growth story at Prosus and its international portfolio of assets.
Thanks to Tencent and its regular dividends, the debate isn’t about whether Prosus will run out of cash or need to raise funds from investors. Rather, the discussions centre on whether Prosus has good enough investment opportunities in underlying assets versus the opportunity to repurchase its own shares.
Management talks about moving from “Tencent minus” to “Tencent plus” — a clear recognition of how the market has historically valued the non-Tencent assets at a discount because of concerns about how capital was being allocated.
The Fabricio Bloisi era will not be judged by how the portfolio of assets he inherited is performing, but rather by how capital is allocated into new acquisitions. If that goes well, then the underlying discount in the market should become a thing of the past.
The recent approach has been a measured one, with a couple of important new deals and extensive share buybacks. Just about every week, Prosus updates the market on the share buybacks by the group. The numbers are eyewatering. For example, it repurchased $72-million worth of shares between 27 October and 31 October. That’s an entire JSE mid-cap in the space of a week! Prosus is sitting on a ton of cash and wants to keep telling a story of capital allocation discipline, as this is the key to achieving a better valuation for the group.
Where it is doing deals, they aren’t exactly small either. Prosus is busy finishing up the acquisition of Just Eat Takeaway.com for around €4.1-billion. Within the next week or so, Just Eat Takeaway.com will be delisted from the Euronext Amsterdam and will be 100% held by Prosus. The market will be watching closely to see how this acquisition performs, all while Prosus continues to invest a fortune in its own stock.
On the J-curve: Lesaka Technologies
The journey of a growth stock is fascinating to watch. With the likes of Prosus showing us what the big dream looks like, companies like Lesaka Technologies are actively scaling their businesses and emerging as highly successful and profitable groups.
In a week filled with buzz around fintech businesses thanks to the Optasia listing, Lesaka Technologies released its results for the first quarter of the 2026 financial year. It achieved its guidance for revenue and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), albeit towards the lower end of guidance. Net revenue increased by 45% and adjusted earnings jumped by 150%, demonstrating that the juicy part of the J-curve is playing out for it. Exponential growth in earnings must be the order of the day here for the group to achieve its potential.
Both the merchant and consumer divisions grew by 43% year-on-year, representing the most important and fastest-growing parts of the group. Don’t ignore the enterprise division, though, where revenue was up 19% and adjusted Ebitda grew by 241% off a modest base. If that segment can keep growing at these rates, it will play a bigger role in future.
The group is cash generative at the operational level, but needs to bring its debt down. Net debt to Ebitda is above the target range, and the group is loss-making once you allow for the interest costs. The focus on adjusted Ebitda is typical for technology stocks on the international stage, but South African investors care more about headline earnings per share, and this is where Lesaka is falling short.
Still, there’s clearly something here. If there wasn’t, then the sellers of Bank Zero wouldn’t be willing to accept equity in Lesaka as the primary source of funding for the deal. Lesaka’s acquisition of Bank Zero is sitting with the regulators and is excluded from the 2026 guidance because of uncertainty over the timing.
Assuming that deal goes ahead, the market will pay attention to how successfully Lesaka manages to integrate and maximise that asset. After all, the only way for a platform business to reach its full potential is through a mix of organic growth in the existing operations and successful acquisitions.
Where would Naspers be today if it hadn’t rolled the dice on Tencent back in 2001? DM