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Clive Butkow

Grotech rebranding as Kalon Venture Partners to avoid marketplace confusion

South African Section 12J venture capital (VC) company Grotech has rebranded as Kalon Venture Partners.

Kalon CEO Clive Butkow said the rebranding was to avoid being seen as associated with another Section 12J VC company, Grovest.

“The confusion in the marketplace was that we were an offshoot of Grovest and that’s where the initial idea for a rebrand came from,” explained Butkow.

This, he added, was partly driven by Malcom Segal being chairman of both companies. In addition Butkow is a non-executive director of Grovest. He said Segal will continue to chair Kalon.

Another factor driving the rebrand was that when the company was still known as Grotech it received a letter from a US company which has the domain Grotech.co, saying his company was “infringing on their identity. This, even though the US-based Grotech does not have a locally-registered entity.

In an earlier press release to Ventureburn, Butkow said the rebranding is aimed at reflecting the company’s strategy to be a global VC company providing funding for African solutions.

He said the revised Kalon mission is to “create as much non-financial as financial value, by investing smart capital, supported by smart interventions resulting in enhanced returns for both investors and entrepreneurs”.

The company’s eight board members have a track record of building and exiting technology companies and have extensive experience in venture capital and a diversity of business building skills. They provide a hands-on approach with all aspects of Kalon investments and dealing with entrepreneurs.

The board comprises tech leaders such as Clive Butkow, former COO of Accenture South Africa and previous lead in its technology business; Gil Oved, a Dragon in the launch series of Dragons Den, a shark on Shark Tank and co-founder of The Creative Counsel, South Africa’s largest advertising agency and Nic Liebmann who co-founded Caleo, a private equity and wealth management group.

‘The Kalon mission is to create as much non-financial as financial value, by investing smart capital, backed by smart interventions’

Through Section 12J venture capital companies, such as Kalon Venture Partners, the South African government aims to stimulate the economy and promote investment in small and medium-sized businesses, while providing tax benefits to investors.

The tax relief is linked to an individual’s marginal tax rate which is capped at 45% for individuals and trusts and 28% for companies, which mitigates the investment risk and significantly enhances the potential return.

Read more: Investors clamouring for 12J VC incentive following tax hike – fund managers
Read more: Can 12J tax incentive create the jobs South Africa badly needs?

Kalon Venture Partners is targeting returns of more than 30% per annum and a minimum of five times the money invested over five to seven-years.

Butkow said in the last 18 months, the business has screened hundreds of companies and three new deals are imminent, with a number of other high growth disruptive digital technology companies in the investment pipeline.

Read more: Grotech fund set to announce first three deals

The first of the three deals is a global leader in influencer marketing software, and the first of its kind built in Africa, to provide and supply a transactional exchange for sponsored content.

The second company is a digital marketplace that enables anyone to purchase and lease solar panels to commercial scale solar energy projects in emerging economies.

The company is domiciled in Delaware, in the US, and Kalon will be co-investing with a Silicon Valley based venture capital company with extensive cryptocurrency experience. The company plans to take advantage of an initial coin offering linked to the blockchain to raise further operational funds.

The third investment is SA’s leading cashback coupon app that gives shoppers cash back on their favourite products, wherever they shop, just by snapping a photo of their till slip.

It has a presence on five continents in more than 50 countries and provides services to over 500 000 retailers. The strategy is to launch the product into many countries across the globe.

A fourth investment is also pending, said Butkow, who added that a term sheet still needed to be signed for this investment.

Butkow said Kalon would likely make a further announcement on its investment in the cashback coupon app this week, adding that it is expected to announce its investment in the digital marketplace next month, while a term sheet has been signed for the cryptocurrency investment.