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Are these the 10 all-time biggest exit deals for SA startups? [Digital All Stars]
Digital All Stars is a series of articles which aims to celebrate the best of South African digital. The articles, which will appear on Memeburn and Ventureburn, recognise and celebrate South Africa’s best digital entrepreneurs, business people, advertisers, and media professionals among others.
Coming in the wake of edtech company GetSmarter‘s $123-million deal announced in May, we take a look at what could be the biggest exit deals for South African startups. Just about all of them are by startups based in Cape Town, with most having developed solutions in the financial services sector.
Note: As acquisition values are not released for all exit deals the list might not be a completely conclusive one. Notably the 2011 exits by C-Sense to GE Intelligent Platforms, rumoured by some to be over $100-million at the time, and Twangoo to Groupon, rumoured to be over $30-million, are not included in the below list.
It’s arguably the biggest exit for an SA startup. Digital certificate and internet security company Thawte, started in 1995 in Cape Town by Mark Shuttleworth, was then sold to internet security firm Verisign in 1999 for $575-million.
2-Kapa Biosystems: $445-million
Cape biotech company Kapa Biosystems, which was started by SA entrepreneur Paul McEwan in 2006, is likely the second biggest exit ever by an SA startup. The startup was sold to Swiss medical company Roche in 2015 for $445-million, according to the company’s 2015 annual report.
The deal is allegedly being investigated by US authorities according to a recent story by a Cape-based investigative news site. In South Africa the Minister of Science and Technology Naledi Pandor has set up a task team to look at whether there was not any fraudulent activity or foul play involved in the sale of the state’s initial 49% in Kapa Biosystems to US investors, for a mere $5-million.
Read more: Swiss medical company Roche to purchase Kapa Biosystems, bolster medical strength
Cape Town based education platform GetSmarter, started in 2008 by Sam and Rob Paddock, is the biggest deal in at least the last two years. The company was sold to US edtech company 2U in 2017 (announced in May) for $103-million plus $20-million in cash.
Read more: Chance meeting helped SA startup GetSmarter secure over $100m sale
Mobile financial service provider Fundamo founded by Hannes Van Rensburg in Cape Town in 2000, was bought by credit card company Visa in 2011 for $110-million.
Read more: Visa snaps up SA mobile financial services company Fundamo for $110m
Cloud computing startup Nimbula, which was founded in 2008 by Chris Pinkham and Willem van Biljon and was headquarted in Silicon Valley and Cape Town, was acquired in 2013 by software titan, Oracle for $110-million.
6-Gyft: ‘above $54-million’
Virtual gift-card service Gyft, started by Silicon Valley based SA entrepreneur and Shark Tank SA judge Vinny Lingham in 2012, was sold in 2014 to global payment technology solution company FirstData for “above $54-million” according to Lingham, in an email to Ventureburn this week.
Read more: First data buys out Vinny Lingham’s Gyft in $50m+ deal
The mobile platform was started in Stellenbosch by Herman Heunis in 2003. World of Avatar acquired the company from Heunis and MIH Holdings (a subsidiary of Naspers) in 2011 for R400-million or about $52-million at the time. MXit has since closed down.
Johannesburg-based digital bank, which was spun out of Deloitte in 2012, was acquired by the Commonwealth Bank of Australia in 2014 for $40-million, according to a story at the time in The Australian.
Read more: Australia’s CBA acquires SA branchless banking startup Tyme
9-Quirk: $35-million to $39-million
Cape Town based digital marketing company Quirk, started in 1999 by Rob Stokes, was acquired by advertising giant WPP in 2014 for a reported R350-million to R400-million ($35-million to $39-million) at the time of the sale.
Read more: WPP to acquire digital agency Quirk
10-WooThemes: ‘At least $30-million’
A maker of themes and plugins for microblogging site WordPress, Woo Themes was started in 2008 by Adriaan Pienaar, Magnus Jepson, and Mark Forrester. The Cape Town-based startup, together with its sister site WooCommerce, sold in 2015 to web development company Automattic in a deal estimated to be worth over $30-million, according to a Techportal article at the time.
Read more: WordPress founder company Automattic acquires WooThemes, WooCommerce