Geeks on a Plane dinner details SA startup ecosystem

The Geeks on a Plane (GOAP) dinner hosted by Wesgro and Silicon Cape provided many insights into the investment landscape in SA and Africa.

The dinner also consisted of a panel discussion with Zoona’s CFO, Keith Davis and investors Monica Brand Engel of Quona Capital and co-founder and CEO of Rippleworks, Dough Galen.

Speaking at the dinner, was co-founder of Silicon Cape and 4Di Capital, Justin Stanford who spoke on his experience in Silicon Valley and his reason for starting Silicon Cape. He explained to the GOAP cohort and other attendees that his main takeaway from his time in the Valley was the value culture that surrounded it.

“For me, the most useful takeaway I had of value culture was the collaboration, the pay-it-forward approach.”

He compared that experience to what he experienced here in SA upon his return from Silicon Valley.

“Here it’s like everyone keeps their cards close to their chest, no one talks about what they’re doing… it was like a new secret turf and I wanted to kind of break that open.”

Read more: Geeks on a Plane: A night out in Cape Town

Years after Silicon Cape was founded, it was inevitable that the SME ecosystem would evolve and the investment space along with it.

According to a report compiled by Wesgro, the 2015 World Investment Report by the United Nations Conference on Trade And Development (UNCTAD) found that SA was, “The largest African destination for inward Foreign Direct Investment (FDI).”

This could be attributed to the country’s location, according to Stanford.

“Where we sit in SA is a great bridge to look in those markets in Africa while still having a western grounding. So we have a Western style of business, culture, infrastructure etc,” he said.

Not only is our location ideal according to Stanford, but our nation currently sits on a growth curve that’s going to kick in soon.

This trend could possibly be because of the growing interest in startups by many South Africans, mentioned Stanford. “There’s this general trend towards ‘startups are cool now’, it seems like everybody is talking about a startup or somebody wants to invest in your startup, and they can convince someone to invest because they’ve heard of this ‘startup thing’.”

GOAP dinner provided key insights into the investment ecosystem in SA

But our location and growing interest in startups aren’t the only things that make our country successful in the SME industry.

“We’re capable of competing in certain verticals globally,” said Stanford, who further supported his point by mentioning that we have the ability to straddle both first-world and developing-world problems. Our fintech solutions can be applied in both first-world nations and developing ones.

Once Stanford concluded dishing out some of his insights, the Zoona panel discussion commenced with Stanford interviewing Zoona’s investors and Zoona’s CFO.

His first question was directed at Engel of Quona Capital about why they chose to invest so soon in a tertiary country.

“The answer to the question is very similar to the theme of 500 (Startups) which is ‘we were in the market’.” She also went on to mention that Zoona made it incredibly easy to accommodate Quona and meet the team halfway as much as they could.

Stanford pivoted the discussion toward SA exchange controls and how they affect foreign investors.

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“It is a significant barrier,” said Zoona CFO, Keith Davies. “There are ways you can go about it that’ll protect you as a foreign investor bringing your money in, you can get it endorsed by the Reserve Bank which will allow you to take it out,” he mentioned.

Davies elaborated on his previous answer saying that the rules and regulations are becoming a bit more relaxed especially in regards to the tech sector.

“We were on a panel with the Reserve Bank and highlighted the problems and how this is really damaging the ecosystem and they did listen. They have eased up on a few things,” Davies mentions.

According to Davies, the biggest issue SA faces in terms of receiving foreign investment and increasing trust between foreign investors and those receiving investments is time. If you lead with enough time and provide the Reserve Bank with the necessary information sooner, you’re able to get through processes much quicker.

CEO of Ripple Works, Doug Galen also elaborated on the state of SA’s entrepreneurial space, focusing on the Mother City in particular. “Cape Town is Silicon Valley all over again and I’m excited to be here to experience that, the next 10 years here are going to be fantastic.”

When asked about how to get more investors to invest their time and money in SA, Galen replied, “You’re doing nothing wrong, we just need to get the word out, we just need to find more opportunities for every project that we launch.”