BIG READ | DNI: from bread distribution to integrated technology

Two decades after it began as a logistics business distributing SIM cards alongside bread, privately owned investment group DNI is entering its next phase of growth with millions of rand committed to telecommunications, technology and fintech businesses.

The strategy has helped turn DNI into a corporate spanning infrastructure, broadband, devices, fintech and digital services.

CEO Ryan Noach, who joined DNI after heading Discovery Health, said the group’s focus is to use its scale and distribution capabilities to bring more people into the formal digital economy.

“We’re a socially relevant organisation, and what we’re seeking to do is broaden connectivity to as many people as we can,” Noach said.

“We believe that when you broaden connectivity, you open up two worlds: a world of financial inclusion and digital experiences.”

DNI generates about R12bn in annual revenue, and has plans to double the business in the next three to five years. Noach wants DNI’s services to reach most South Africans every day within five years.

“If we can do what our mission is — to broaden connectivity, drive financial inclusion and digital experiences — we see ourselves in five years touching the lives of most South Africans every single day through the range of our services,” he said.

The group’s recent investment of R2.1bn in a number of telecoms and digital companies has taken it further along the technology value chain.

Fibre infrastructure group Frogfoot, internet service provider Vox and prepaid fibre business Hypa give DNI exposure to fixed broadband infrastructure and internet services, while Mission Mobile is tackling the accessibility of smartphones and affordability of data. KnowRoaming gives it access to the fast-growing eSIM market and a business that operates across international borders.

Frogfoot plans to accelerate fibre rollout in underserved township and lower-income communities and quadruple its annual rollout rate to 360,000 connected homes over the next 12 months, creating more than 5,000 jobs.

DNI’s transformation is a long way from its origins. The company’s founder, Andrew Dunn, who is now the chair, initially used delivery trucks already transporting bread to distribute SIM cards to townships, informal settlements, spaza shops and taverns. The model grew into one of the country’s largest SIM distribution networks.

DNI is now the largest independent wholesaler of mobile devices, distributing more than 4-million handsets a year. It operates in 35 countries and has about 25 businesses in mobile, hardware and devices, technology, credit and value-added services, employing about 1,200 people.

The objective is not only investment but to find ways for the businesses to work together, whether by combining products, using DNI’s distribution relationships or helping founder-led companies access customers and capabilities they could not easily build themselves.

Noach said the group’s approach is to combine the strengths of those businesses rather than operate them as isolated investments. “We’re actually a very operational investment team, and we’re involved in the businesses every day.”