BridgeFort diversifies into financial services

BRIDGEFORT CAPITAL, formerly Medtech Holdings, is moving to establish itself as a leading financial services business in Africa through the acquisition of Diaspora Kapita (DK), a South Africa-domiciled investment holding company.

DK, established in South Africa in 2014, is a collaborative venture between Zimbabweans living in the diaspora and their counterparts in Zimbabwe. The group provides a range of services and investment opportunities tailored for the diaspora community.

These include comprehensive funeral services, which cover funeral arrangements, burials in South Africa and repatriations to Zimbabwe; diaspora-targeted investments and alternative investment solutions.

DK is also the parent company of a number of companies dedicated to creating value within the African financial services sector and among the African diaspora community.

BridgeFort, on the other hand, is a manufacturing, retail, distribution and services company in Zimbabwe.

It operates in three market segments — fast-moving consumer goods, medical supplies and manufacturing of light industrial products.

In an interview, Bridgefort Capital’s incoming chief executive Mr Vhusi Phiri revealed that the transition is anchored in its acquisition of DK, a strategic move that consolidates the expertise of the African diaspora with South African partners.

“BridgeFort Capital is now well-positioned to become a leader in the African financial services landscape by aligning with diaspora aspirations and meeting the urgent need for sustainable investment options in different economies.

“New investors have an opportunity to support a proven, ambitious business model that directly addresses the unique demands of Africa’s growing and globally connected communities,” he said.

BridgeFort has since issued a circular indicating its intent to migrate its Class A and Class B share listings to the Victoria Falls Stock Exchange (VFEX) by way of introduction. The group, listed on the Zimbabwe Stock Exchange (ZSE), groups its businesses into classes A and B portfolios.

The Class A portfolio involves consumer goods and primarily includes 50,1 percent of Zvemvura Trading (Private) Limited, trading as MedTech Distribution; and Chicago Cosmetics (Private) Limited, a 51 percent subsidiary of MedTech Distribution.

The only asset in the Class B portfolio are cash and bank balance of US$120 000.

According to a circular from the company, the BridgeFort Board approved the termination and subsequent listing of its shares on VFEX pending shareholder and other regulatory approvals.

Mr Phiri said DK’s diversified model offered a compelling opportunity for investors interested in the high-potential insurance market of South Africa and the untapped African diaspora investment landscape.

“Suppose 5-10 percent of annual Zimbabwe diaspora remittances were redirected into a fund; DK could attract between US$100 million and US$200 million annually, significantly fuelling its growth initiatives,” he noted.

According to Mr Phiri, in terms of life insurance and funeral services expansion, with substantial growth opportunities in South Africa’s life insurance sector, DK is positioned to capitalise on its growing portfolio.

In 2023, South Africa’s life insurance industry managed assets worth approximately R4,08 trillion (around US$227 billion), with the market consistently delivering strong returns and stability.

Life insurers in the country disbursed nearly R599 billion across claims worth US$32 billion, underscoring the strength and reliability of the industry.

“DK’s strategy includes an innovative approach to consolidate independent black-owned funeral service providers, a sector that contributes significantly to life insurance and funeral policy sales.

“Through its brands 21st Century Life and AM Mfolozi, DK operates 38 branches across five provinces, generating approximately R80 million annually in gross written premiums. The current business model involves remitting roughly 45 percent of premiums to external underwriters,” said Mr Phiri.

He noted that the recent acquisition of Linar, an insurer, enables DK to retain these premiums, capture underwriting profits and account for embedded value internally, thereby creating additional value.

Mr Phiri said with the listing and capital raise, DK aims to scale further by acquiring additional funeral service businesses.

“This consolidation positions Diaspora Kapita as an attractive partner for investors seeking entry into South Africa’s insurance landscape,” he said.

On tapping into the African diaspora remittance potential, Mr Phiri said the company aims to serve this market through the Tsigiro Usekelo platform. DK’s proprietary digital platform offers a one-stop shop for affordable mortgages, insurance and cross-border financial products tailored for diaspora needs.

Mr Phiri said DK targets to manage a US$2 billion Diaspora Fund in the next two decades, enabling Zimbabweans abroad to invest securely back home.

“By offering services on Tsigiro Usekelo, diaspora clients can access investments, insurance and mortgage options seamlessly, regardless of their global location.

“This platform currently allows clients to invest in unique options like cattle-backed savings in Zimbabwe and South Africa, while enabling them to purchase funeral coverage for themselves and their families back home,” he said.

In terms of alternative investment solutions, Mr Phiri said DK addresses this need with innovative financial products, such as cattle-backed savings and insurance that offer capital preservation.

He said through the Tsigiro Usekelo platform, DK targets Zimbabwe’s retail market and institutional investors like pension funds, encouraging the allocation of around 10 percent of pension assets into alternative investments.

“By directing diaspora remittances and local investments into productive channels, DK can contribute significantly to stabilising savings, offering diaspora clients peace of mind with inflation-protected investment options,” he said.

According to the BridgeFort circular, the VFEX listing will be preceded by the issuing of 83 440 639 BridgeFort Capital Class A preferred shares to Diaspora Kapita shareholders, along with various parties owed sums of money by DK and its subsidiary or associated companies.

After the allotment, the company shall own 100 percent of DP, who, in turn, will own 74,12 percent of NAFUICO, 100 percent of Tsigiro Usekelo, and other investments.-herald