The low-down on Gather Online’s R10m investment, next round, expansion plans

Social networking platform Gather Online this week announced that it had raised R10-million from former Dimension Data CEO Brett Dawson who will be joining the startup’s board of directors as its chairman.

The announcement was made on Wednesday (4 April) and the investment will see Dawson get a 10% stake in the startup, effectively making him its largest external investor.

The platform which was founded in 2015 by South Africans Michael van Andel and CEO David Price is based in Australia and has offices in Johannesburg.

In an email to Ventureburn yesterday, Price said the investment is part of the company’s third seed round, with R2-million still available for investment. The company is still raising further capital for the round, he pointed out.

Dawson’s R10-million investment makes him Gather Online’s largest investor. The company aims to raise $5-million in its next funding round later this year

“We originally set a maximum of R10-million for the round, but we raised R2-million in November and then R10-million from Brett on 24 Dec (sic), so we then expanded the round to a R14-million cap,” explained Price.

The company had raised a total of R13-million in previous rounds and expects to raise $5-million in another funding round to be held around October and November.

He added that Dawson’s investment had taken some time to materialise because it needed to meet the approval of the Reserve Bank. The transaction was completed in February, he said.

Gather Online’s other backers include a collection of 10 investment bankers and angel inventors, as well as a South African hedge fund CEO who Price said has invested through a blind trust and wished to remain “anonymous”.

The company is yet to generate revenue and is currently focusing on growing its user base.

Funds to improve platform

Gather Online currently has a “significant presence” in the UK and France and intends to use the capital injection to fund further expansion into Europe, US and Asia, he said.

Price said the company will focus first on countries like the Philippines and India where a significant percent of the population speak English.

“US companies focus on the US, we are trying to dominate in smaller less competitive areas, but our platform is about conversations, and currently we are mainly global (although in the future we will cater to specific locations), so we are focusing on English conversations for now,” he said.

The funding, he said, will also be used to simplify the platform’s user interface and navigation as well as improve its user experience.

“We are also using funds to attract influencers and contributors to each community on the platform, so we have the best content per area or niche all aggregated in one place — no other platform does this,” he said.

More engagement

So what sets it apart from the myriad social networks out there?

Gather Online’s platform allows users to interact with communities of like-minded people through time-limited access to discussion on a range of topics.

The platform currently has more than 40 000 daily active users and claims its “most avid users” have daily sessions exceeding 20 minutes.

In a statement yesterday, Price said the startup’s platform “enables people to shift from passively consuming content”.

“It fills a real gap for engagement in the current social media landscape,” he added.

“On the other major platforms, a post only gets engagement from about one percent of people so 99% are passively consuming. Gather Online overcomes this by facilitating more fruitful communication which has a beginning and an end, like we have in real life,” he adds.

Freemium revenue model

While Gather Online predicts that most members will choose its free option, it plans to generate revenue through a premium option where members will pay to have extra features and unlimited accounts.

“We will also generate revenue by providing B2B or enterprise services, which will be paid,” he said, adding that this would be aimed at corporates that want internal platforms for collaboration and to discuss various topics with their employees.

Featured image: Gather Online via Facebook

Daniel Mpala


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