Most of the up to R500-million that investment group DNI has committed to Mission Mobile, a Johannesburg start-up that sells smartphones on repayment terms through mobile operators’ stores, is debt, co-founder and CEO Timothy Strike told TechCentral.
The package is “majority debt”, with DNI also taking an equity stake that makes it a “strategic minority shareholder”, Strike said in an interview. He would not say how big that stake is or what milestones must be met for the full amount to be released. When the deal was announced on 21 September, the companies said only that the money would come from DNI’s own resources and “ring-fenced debt facilities”.
Mission Mobile, founded in 2023 by brothers Timothy and Adam Strike, operates inside Telkom stores and is in “very advanced discussions” with Cell C, Strike said. It has spoken to Vodacom and MTN but has nothing formal with either yet.
Its first product, DataBack Device, is aimed at prepaid customers who cannot get, or cannot afford, a contract. The customer pays 15-25% of a phone’s retail price upfront and the balance over 12-18 months. Each repayment triggers a data bundle, credited in real time at a discount Mission Mobile has negotiated with the operator – currently 20% off a 3GB+3GB bundle. A cashback-on-recharge loyalty scheme is in development. Strike described the product as “almost acting as a postpaid-type product, but very much for a prepaid market”.
Prepaid accounts for 82% of South Africa’s 117 million mobile subscriptions, according to communications regulator Icasa’s latest State of the ICT Sector report (PDF), though Icasa cautions that some operators count any Sim not disconnected within 90 days, which may overstate the figure.
Risk off the operators’ books
The pitch to operators is that Mission Mobile carries all the credit risk. Handset financing has become expensive for networks, Timothy Strike said: phones are priced in dollars, the rand weakens and contract terms have stretched to 36 and 48 months to keep them affordable. “The network is in the business of building networks and Sim cards and voice and data,” he said. Operators would rather spend their capital on 5G and fintech than on building a book of higher-risk handset debt.
In return, the operator gets a Sim that stays in use. When the Sim goes into the phone in store, it launches Mission Mobile’s app and is linked to the customer’s account. 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 network’s Sim, with their existing number, in the second slot.
Strike said Mission Mobile can “guarantee with a lot of conviction” that the Sim remains active. The phones are controlled with mobile device management (MDM) software, which lets Mission Mobile lock a handset if repayments stop. Strike said there are grace periods and an escalation process, so “it’s not like an immediate lock”. The software is removed once the phone is paid off.
The upfront payment and the lock are what allow lenders like Mission Mobile to go into “riskier segments of the market”, he said. Bad debts and losses on defaulted accounts of 15-20% are “typically a healthy range for this market”, Strike said – a level he acknowledged would sit “way above” the risk tolerance of a bank.
Mission Mobile also assesses customers with Beam, the technology the brothers built before the current business. Beam analyses bank statements that customers agree to share, to gauge how they earn and spend. The Strikes first sold it to insurers, lenders and retailers, but found those companies slow to plug it into their legacy systems, and switched to serving consumers directly.
Mission Mobile is not registered as a credit provider. Strike said the company falls “outside the ambit” of the National Credit Act because its product is “more of a rental model”. Customers who can no longer afford their repayments are encouraged to return the phone, after which they are released from the obligation.
DNI’s spree
Strike said Mission Mobile began talking to DNI about 12 months ago and chose it over venture capital investors for three reasons:
- Its balance sheet and bank-backed debt facilities to grow the handset book;
- Its warehousing, supply chain and distribution operations; and
- Its permanent capital, which allows a longer horizon.
“We’re not chasing big numbers very quickly … fundamentally you’re dealing with credit risk,” he said. He agreed that the debt was priced more competitively than a commercial bank would have offered, saying that as an equity holder DNI had reason to keep rates low.
DNI was founded by Andrew Dunn, now its executive chairman, as a distributor of Sim cards through informal traders. Ryan Noach, formerly CEO of Discovery Health, took over as CEO in March 2024. The group says it has consolidated revenue of more than R12-billion/year and a presence in more than 35 countries.
Mission Mobile is one of several recent DNI deals. In August, a DNI-led consortium took new shares in Frogfoot, Vox and Hypa in a transaction valuing the businesses at R14.4-billion. DNI has also invested in eSim provider KnowRoaming, and Business Times reported that the group has committed R2.1-billion across the deals. – © 2026 NewsCentral Media
