The Southern African Venture Capital and Private Equity Association (SAVCA), the industry body and public policy advocate for private equity and venture capital in the region, has released its 2017 Venture Capital (VC) Success Stories report.
This report highlights the role that VC plays in supporting South African business, and follows the launch of the SAVCA 2017 VC Survey that revealed that VC investments in ICT comprised 27% of the deals concluded in 2016.
The tech specific case studies included in the report range from e-commerce and mobile apps, to augmented-reality gaming and fintech.
“Many of these home-grown businesses are striving to address pressing socio-economic issues through the application of smart, technology-orientated solutions; making a meaningful impact on society, whilst generating profits for shareholders. It is clear, as showcased by the R3.5 billion invested by the end of 2016, that VC has had a tremendous impact on the development of the local economy,” says SAVCA CEO, Tanya van Lill.
“Early stage capital is essential for investee company growth, but VC adds additional valuable contributors to long-term success: strategic and operational expertise, sound corporate governance, expanded business networks and improved business processes.”
The publication not only enables VC practitioners to highlight their successes, but also captures the experiences of the entrepreneurs and business owners with whom they partner.
“South Africa’s entrepreneurs are certainly driving the kind of local innovations that stack up well against international peers,” says Lill.
Tech Success Story Examples
The are several tech success stories such as Augmentors Game, CarZar, Domestly, Flightscope, Fundamo, GoMetro, orderTalk, Quicket, Snapplify, Spazapp Systems (Pty) Ltd, SweepSouth, UAV Industries, UCOOK, Wellness Warehouse and WhereIsMyTransport.
Find below profiles of three firms:
Cape Town-based augmented reality gaming start-up, Augmentors, was founded by Michael Deon and Kyle Haffenden in February 2016. Following a capital injection from Newtown Partners (R 500 000) on reality television show, Shark Tank, Augmentors conducted the first initial coin offering (ICO) in South Africa, raising US $1 million within 30 days. The game uses augmented reality, which is cutting edge technology that superimposes a computer-generated image on a user’s view of the real world, allowing illusion and reality to collide. The game also uses the Bitcoin blockchain, which allows unique ownership of digital assets (in this case creatures).
Cape Town-based Snapplify (investor, AngelHub Ventures) was founded in 2011 and specialises in the distribution of digital publications, with a particular focus on the education sector. It has developed a solution for schools that enables students and teachers to access and read e-books that are hosted in the Snapplify e-learning content cloud. Users can download textbooks from leading publishers – such as Macmillan, Pearson, Oxford and Cambridge – directly to their smartphones, tablets or desktop computers, and read them offline. With the Snapplify e-reader, students can make notes, highlights and bookmarks for a more engaging and richer learning experience. Snapplify’s enterprise value currently stands between R 200 million and R 300 million with the company employing 35 people.
A mobile app (investor Kingson Capital) that enables informal convenience stores, or spaza shops, to order stock straight from big brands and suppliers. They benefit from lower bulk-buying prices and direct delivery, sparing them a trip to the wholesaler. The app also allows owners to earn additional income by selling products such as mobile airtime and data, life insurance policies and electricity, directly from their handsets. To start buying and trading, shopkeepers need to register on the app and make a deposit into their automatically created e-wallets. Spazapp, which takes a percentage of all sales processed through its system, has led to the creation of over 250 jobs through the training of young people as agents.