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We’re nearly six months into 2018 and already South Africa has seen some big deals and acquisitions in the tech sector.
It’s not just Uber Eats’ acquisition of orderTalk — a tech company that was founded in South Africa, before being relocated to the US (see this story and this one) — that is getting startups and entrepreneurs to pop corks off champagne bottles.
There are a whole number of other deals to celebrate too — like the investment that Cape Town based mobile software firm wiGroup secured from the Richard Branson’s Virgin Group earlier this year — or an investment worth tens of millions of rands in SA startup Giraffe led by Edge Growth.
Here are Ventureburn’s four big deals of the year so far and the advice from entrepreneurs behind them
Then there was the R13-million investment by 4Di Capital and others in Internet of Things (IoT) platform Sensor Network, an undisclosed sum by Knife Capital in edtech company SkillUp and a seed round that social enterprises and startup Lumkani closed with 4Di Capital and two other funders earlier this month for an undisclosed amount.
Let’s not forget about the funding round Cape Town-based machine-learning startup DataProphet secured from venture capital firm Knife Capital, announced in March. Knife Capital wouldn’t disclose the details of the deal other than to say that it was a “multi-million” dollar deal.
And there’s Joburg-based startup Aura, which last month concluded a deal with Uber and then announced that it had secured the first R2-million in a R6-million equity raise to help fund its cloud-based security platform (see here).
These are only the deals that Ventureburn is aware of. Many others worth millions have likely been concluded under the radar.
Here then are Ventureburn’s four big deals of the year so far and some key business advice from the entrepreneurs behind them.
wiGroup: Create environments people can thrive in
Even before they shared dinner which led to the sealing of the deal, wiGroup founder Bevan Ducasse (pictured above, lower left pane) has sought to follow entrepreneur Richard Branson’s advice on creating a company where staff can thrive.
In January the Cape Town based mobile software firm announced that it had secured an undisclosed amount in funding from the Virgin Group and retail solutions provider Smollan.
This follows similar investment from Investec Asset Management in 2015 — also for an undisclosed sum. Ventureburn reported at the time that the Investec transaction was for a stake of between 25% and 50% of the company, in a deal reportedly believed by the industry to be worth just under a whopping R400-million.
Branson, says Ducasse, spent the dinner giving some advice to those present. “He talks about creating environments where people can thrive,” Ducasse added at the time.
Giraffe: The value in competitions
It’s been two years since SA startup Giraffe was crowned the 2016 Seedstars World winner, scoring equity investment of an undisclosed amount and putting the company on the radar of local and international investors.
In April the Johannesburg startup, which runs a web platform that matches job seekers with job placements, announced a second round of funding led by Edge Growth.
While the details of the deal were not disclosed, the lead investor revealed that its own share of the contribution was valued at “between R10-million and R20-million”.
Giraffe CEO Anish Shivdasani (pictured above, top right pane) told Ventureburn last month that winning the South African leg of the competition generated media interest which culminated in the startup’s first round of finance led by Omidyar shortly after winning the SA leg.
“Startup competitions provide the opportunity for visibility and PR — that’s why it’s useful to get involved,” says Shivdasani.
Sensor Networks: Know how to deal with corporates
Startups says Sensor Networks founder Mark Allewell (pictured above, lower right pane) must have the patience of a saint when doing business with corporates.
His Cape Town based company, which is currently working with five insurance companies to roll out its Internet of Things (IoT) sensors, last month announced that it had secured another round of funding, of R13-million from various local funders.
“From my experience, sometimes it’s good to be brutally honest with corporate people that you deal with, as they are people as well and if the relationship can’t take criticism, then it’s not worth having that relationship,” Allewell told Ventureburn last month.
For Allewell, who started Sensor Networks in 2015 after running two other companies, one has to have the “patience of a saint” when dealing with corporates
“They are people the same as us, but because of their environment, personal financial security and layers of staff, they don’t have the urgency,” he says.
SkillUp: Try and try again
Fourth time lucky. That’s probably how Matthew Henshall would describe his current startup — SkillUp. The Cape Town based edtech company announced in April that it had received an undisclosed amount in funding from venture capital company Knife Capital.
After working as an engineer in a fast-moving consumer goods company, Henshall started three businesses all in the space of one year. These included an education platform, a training video site for engineers and a plan to install software at schools. None lasted longer than eight months.
But it’s been his latest startup — which he founded in January 2016 with Federico Lorenzi, Andrew Cowley and Kent Hawkins (who developed Superbalist’s Android app) — that has stuck.
SkillUp offers parents and university and school students across South Africa access to thousands of highly skilled and vetted tutors based on grades, subject, location, and budget.
And Henshall’s advice? “What I realised is that if you want to grow you need to surround yourself with like-minded people,” he muses.
Editor’s note (20 June 2018): There have been so many deals in the local tech scene that Ventureburn was bound to have left out one or two by mistake. We have since added Data Prophet’s “multi-million” dollar deal announced in March by Knife Capital.