JSE-listed Niveus Investments, a subsidiary of Hosken Consolidated Investments, has launched Niveus Ventures to fund emerging entrepreneurs in Africa’s technology space.
“Building an enduring business remains an immense challenge,” says Jesse Hemson-Struthers, head of the investment team at Niveus Ventures, who has successfully launched, invested in, grown and sold several businesses. These include SAcamera, which Naspers acquired in 2012; BetTech Gaming, providing software to three of the top five listed gaming companies in Africa; LifeQ, wearable healthcare technology with clients such as TomTom; and SaveMoney, a fast growing FinTech startup.
“Most businesses don’t survive past the startup phase despite great ideas,” he continues. “The downfall is execution and turning ideas into viable businesses. Knowing when to scale is not that easy, and while top entrepreneurs know their industries very well, they don’t always have the operational experience of starting and running a business.”
Niveus has the systems and structures in place as a venture capital operating partner to provide support in those crucial, early stages of business and to reduce the risks of failure. In this way, entrepreneurs are able to focus on the innovation required to differentiate their businesses from their competitors.
Niveus Ventures specifically believes in people. “Investment criteria comes down to the right person and the right team. We look for talented individuals who may have started a business once or twice before, or individuals who have achieved corporate success but haven’t been able to realise their entrepreneurial potential,” says Hemson-Struthers.
The venture capitalist will provide entrepreneurs with financing that fills the gap between angel funding of less than R1 million, and capital from listed firms or private equity groups that range between R100 – R200 million, which is typically difficult for a younger business to secure.
The team will also share their entrepreneurial expertise and operational know-how to provide entrepreneurs with strategic, hands-on support – from inception to maturity. The team is specifically looking to build businesses in Africa’s rapidly growing technology space, including those with a global agenda, and plans to invest in emerging technologies and disruptive ideas that will change the way people live, transact and communicate.
There’s an increasing number of successful tech entrepreneurs and exits coming out of South Africa and making a name for themselves internationally, including mobile financial service provider Fundamo, which was acquired by US-based financial services giant, Visa, for $110 million. WooThemes and WooCommerce, co-founded in 2008 by Adriaan Pienaar, Magnus Jepson, and Mark Forrester, were acquired by US-based WordPress.com holding company, Automattic, for US$ 30 million. Additionally Mimecast, founded by South Africans Peter Bauer and Neil Murray, was listed on the Nasdaq stock exchange in New York late last year. It now commands a hefty market capitalisation of US$466 million (around R7,3 billion).
As strategic investors the team will take a hands-on approach and provide in-depth knowledge of the market, ensuring that potential entrepreneurs start their businesses on a solid foundation.
Hemson-Struthers believes Niveus Ventures will fill an important gap to support entrepreneurial innovation in Africa. “Our team has an established track record of building successful businesses and delivering shareholder value. Using our operational expertise we want to build strong enduring businesses that will help power Africa’s growth.”