All right. What's up party people? My name is Sunonny Ray. This is the Sunny Ray Show. I'm excited to bring my second guest on stage here. His name is Farhad Bihhat. He's the CEO of Focosian and we're going to talk about on using digital footprints to help credit invisible people access the financial system while confronting the hard questions of consent, accuracy, and trust. With that said, Farhad, you're on the other side of the world, right? Somewhere you said Cape Town or something.
I'm in Johannesburg.
Johannesburg, right?
Yeah.
Cool. Well, thanks for joining me, man. Let's go right into the deep end. what are you building? Why should people care? What's like the problem that you're solving?
So, let me start with the problem. We've been providing social and digital media screening for 11 and a half years now since 2015 and we've grown from typically servicing the HR and recruitment space and we're moving into some other areas which brings me to what are we building? So, there's two main things at the moment. We are looking at a continuous monitoring platform for organizations as well as building a alternative data credit scorecard utilizing people's online presence and behavior specifically aimed at thin file and credit invisible people. That seems like a noble cause and a big problem to be solving. So, let's just slow down a little bit. Let me go back. so you notice that everyone already checks each other out informally and asks like what it would take to do it properly, right? So, when did that stop being just like an observation and start turning into a company? So it was actually I was driving home from work one day had this be in my bonnet of starting a business and I had a basic concept and idea and I heard an interview on the radio of an American lady who came to South Africa on holiday and she tweeted something in 2011 and I heard this in early 2015 and between 2011 and 2015 her tweet caused her to go viral and get fired. And that's when the penny dropped with me going, you know what? When we go out and we're at a barbecue or a pub or a club or a birthday party, whatever it is socially, and you meet someone and you like them, two people land up stalking each other online because they've got their own criteria for a vacant position of romantic partner, right? And when I realized this, I went, "Hold on. There has to be a way of taking this that we all do in our personal lives and converting it, flipping it into a professional context. So I went down the road of investigation research for many months and I had actually gone through something like that with my girlfriend at the time which I must say is now my wife and also my co-founder in the company. Right. So, I discovered that anthropology is the best human science and most accurate human science to use in assessing people's online behavior. And lo and behold, I mean, it's written in the stars. My wife is an anthropologist. So, that's kind of where we landed up going.
Awesome. Hey, Far, is there someone typing in the background? I hear some clicking sounds. I don't know if that's your side or my side, but.
I think it's my headset that's moving around a little bit.
Okay. Maybe the cable. Okay, cool, So, let's keep moving. we already have a lot of people listening live, so that's awesome. Hey, in 2015 in South Africa, who was the first person willing to like pay you for this and what do they want to know?
So, through lots of cold calling, lots of outreach on LinkedIn. I scheduled a meeting with a gentleman. I'll name who he is. His name is Rob Riddout. I actually think he's immigrated to the Netherlands, executive head hunter, and he looked at us and went, "That sounds great. I've got two candidates, one for a senior position, one for a junior position. I'd like to see if your work can help me in my negotiation to get them an offer." And lo and behold, it worked for the one and not for the other. The first person, the executive person, there were actually scandals attached to his name. He was the CFO of a division within a large bank here in South Africa and there were all sorts of fraud allegations and other things around him that didn't come up. And the other junior person she was actually a call center agent back in the day for Groupon when they were still around. And what we found about her through a Google search was that she had glowing reviews of customer service. many of them through her position at Groupon. So, our report, he used that to help get her another job. he used our work from the beginning as a way of differentiating his candidates to his client base.
I love that. That's really resonant. So I guess you know screening someone's digital footprint sits close to a line I guess like where exactly do you draw it and like what do you refuse to kind of look at?
Yeah. So there's this age-old sort of push and pull that goes on with it of what I do in my personal time is not an employer or potential employer's business right and it's not what we do is or our process I don't know about the competitors we have from a global perspective but our process is the things that we won't touch or don't include as part of our reporting anything that is classified as protected information. So sexual orientation, your religious belief system, your political affiliation, pregnancy status, you know, a lot of females have been excluded through the recruitment process because they can be seen to be pregnant or a potential employer finds their Instagram and what do they find? Oh, there's a sonogram there and you know, she's advertising she's pregnant on Facebook and Instagram. And the onus then becomes on the employer to prove that wasn't part of their decision-m process. So basically what we do is we make sure that what shouldn't be seen isn't seen to the decision makers and do it in a balanced constructive way by including both the positives and the negatives of an individual. We're not just going oh this person had a drink on a Friday night. You know what? We don't actually care about that. But when a person's drinking habits become a problem and it can be seen to be a problem, then that's a different issue. so those are kind of the things that we involve with. And what we won't look at is anything that's considered protected.
I love that. That's really interesting. What a cool insight and what a big problem to be solving. I love it. So, you know, a machine reads a post and a human reads the same post. Can you give me a case where the human read it, you know, completely differently?
Yeah. I'll give you one that I saw a couple years ago. one of the things that machine learning and AI isn't really able to do is to distinguish between satire, humor, and intent. Right? So, there's quite a well publicized meme from about 8 n 10 years ago. And I'm going to preface this by saying I never have and never will publicly state anything relating to my political beliefs. I'll state it in circles. And what I'm about to say has got nothing pro or anti either one of these two people. But there is a meme where it has a picture of Barack Obama on the one side and Donald Trump on the other side and the words are exactly the same above and below the picture and the words say when you know you're A human has two different entirely interpretations of that which views it as humor and a meme where a machine doesn't. a machine will look at it and just go unprofessional language use flagged.
So that's kind of the distinction that needs to be made.
Got it. So they don't get memes quite just yet.
You claim you claim coverage of more than 250 platforms. Like what what's the hardest one to see into and like why does that matter?
I think Facebook is still the hardest. Facebook because of the Cambridge Analytic scandal when was it back in 2015 16 over the years they've just gradually shut down more and more that's publicly available and I think that's also a key thing along the work that we do it's strictly focused on public domain information not looking at your DMs or anything like that but Facebook over the years has become a very large marketing agency, should I say? That's what they do. They sell ad space, right? They're a social networking platform or they're an ad advertising agency that happens to be a social networking platform. So, the more they lock certain things down, the more data they have to be able to upsell their customer base with.
Interesting.
So, yeah.
Agreed. so explain can you explain the feeder credit score like what signal in someone's digital activity actually predicts whether they repay?
Okay. So what we've been doing is I've been going through there's about 8 to 10 different thesis papers that avail are available online globally from various prestigious universities. One of them if I'm not mistaken is the University of Oxford. there's a couple from the US and they all basically draw the same conclusion that is you can use online presence and activity as a precursor scoring mechanism and score card to someone's propensity to pay back credit and there's certain elements. So what we're busy doing is building a scorec card that has 21 different signals and those signals look at things like the use of financially distressed language right on LinkedIn posts, Twitter posts, ex posts, Instagram captions, Facebook posts, all of these sorts of things. It looks at things such as your network. How strong is your network? What is it that your network does? because people who are more stable tend to associate with people who are more stable, right? So, there's all of these different nuances and aspects that are looked at. in the initial build of what we're busy with at the moment, I actually ran it on myself. and I'll give you a very small background. as I'm sure you know Sunny when you start a business thing things aren't all sort of smooth sailing right in the early years I took out enormous amounts of debt and loans to keep the company alive where in South African rand I was well over a million rand in debt and when the business started gaining traction my credit score had absolutely plummeted like you cannot believe because I wasn't paying back this loan or that credit card and you know all of these things. But over time cleared out all of my debt and round about the time I cleared off all of my debt which was actually about 18 months ago 12 months ago is when I started looking at these models. So I ran it on myself and the model that we're busy building gave me a credit score that is within 7% accuracy of where mine is right now today. So basically what it's doing is it's enabling people who are in these thin file and credit invisible scenarios especially Gen Z's I mean we're hearing all the time of the cost of living and affordability how are they ever going to buy a house and if you don't have a credit score what do the banks do they turn around and they say to you know what we'll give you prime plus 7% on your home loan or on your car loan and then you just land up in this vicious circle. So they they're assessing someone who doesn't have a history and they don't know if they are positive or negative or neutral against a person who is been in the system for 25 30 years and is a thick file person, a mature credit person.
Being being credit invisible is like a life sentence in most economies. like who does this reach that you know maybe a bureau cannot.
So bureaus look at historical payment records and they get that information from the banks and retailers who provide credit. Right now if the bureau doesn't have information on you the bank or the retailer the odds of them giving you credit is very low if any. Most people have to go through the very long process of getting a credit card with a very small limit, go and buy, I don't know, your packet of chips or your Subway or McDonald's and then you pay it back 2 weeks later and you do that for a few months, you get a credit limit increase and you spend two or three years building this profile. Now, especially in countries like South Africa, we have something that's quite big called the township economy or the informal workforce, right? The township economy in South Africa is said to be worth about 500 billion rand. Now these are unbanked people. These are people that don't have bank accounts that you need to gather alternative data but they have disposable income available. So what a lot of the bureaus have started to look at is what alternative data can we use to measure them of things like loyalty programs store loyalty programs at your grocery store. So they get to know what items are you buying. Now those are dependent on someone's membership to that loyalty program. Whereas utilizing digital online behavior of social media, even in the township economy, even in the rural areas in South Africa or anywhere in the world for that matter, we see between a 92 and 97% penetration rate of online presence of people holding at least a Facebook and an Instagram account. So that already gives you information and data to be able to use to take the qualitative and turn it into quantitative to build your scorecards. And we're not saying give someone who's credit invisible you know a $250,000 home loan. What we're saying is this should be this can be an entry point into graduating someone into the formal credit bureau environment and payment process and tracking.
Got it. Yeah. And we only have a few minutes left. So maybe just a couple more, you know, landing customers is like the 90-day push, I guess, and there's a date later this year that matters. So like what has to be true by then?
For us, it's very simple. We're very fortunate that just over 18 months ago, I think it was February, March in 2025, we secured private equity investment funding. And that's enabled us to grow substantially. And with that, our first full year's target is 100% revenue growth. So, we're on track for that. And that's basically what we need to do within the next 90 days still to be on track for 100% growth and then primed to do another 50 to 70% growth for the next financial year. That's our biggest push.
Good for you, man. That's amazing. Where do people learn more about you, Farhad, and about the company? And we'll land the plane after that one.
Okay. if they want to know about me, visit my LinkedIn. I'm very easily found online. Facebook, Instagram. My Facebook is quite locked down. Instagram, go have a look. I love Jim. I love my cats. You'll see that. and the company, please just visit ferosian.com. F A R O S A N. lot of information about our history, where we've come from, our offerings, things such. And yeah, anyone wants to connect, always happy to connect.
Amazing. We see I see a bunch of people listening live as well. So, thank you all. Really, appreciate it. And I guess until next time, thank you so much. Hang out for one minute. I'm going to bring the stream to.
