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The South African venture capital (VC) space is heating up, with the latest entrant, Niveus Ventures, announced on Tuesday.
The entrepreneur-led fund is backed by Niveus Investments, a subsidiary of Hosken Consolidated Investments (HCI:Johannesburg), and is aimed at African tech startups looking to go global.
According to a press release sent to Ventureburn, the fund 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.
Heading up the team at Niveus Ventures is Jesse Hemson-Struthers, 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.
“Building an enduring business remains an immense challenge,” he says. “Most businesses don’t survive past the startup phase despite great ideas.”
“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.”
In a bid to curb that, the Niveus Ventures team will provide support beyond any funding it gives entrepreneurs.
Taking the “back the jockey, not the horse” philosophy to heart, the fund appears to be more concerned with entrepreneurs than the businesses they launch.
“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 fund, it seems, is inspired by the increasing number of successful tech entrepreneurs and exits coming out of South Africa and making a name for themselves internationally.
Ever since mobile financial service provider Fundamo was acquired by US-based financial services giant Visa in 2011 for US$110-million, things have been heating up. 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 and bike radar startup iKubu was bought out by Garmin.
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).
According to the realese, 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.
It’s bullish about it’s chances too.
“Our team has an established track record of building successful businesses and delivering shareholder value,” says Hemson-Struthers. “Using our operational expertise we want to build strong enduring businesses that will help power Africa’s growth.”