LG has announced the winners of its Global Ambassador Challenge in South Africa, marking the first time locals have received grants and titles as…
Explains Dominique Collett, head of AlphaCode and RMI senior investments executive,”The RMI board believes it is important to identify, partner and grow the next generation of financial services entrepreneurs so that the group can continue its legacy of innovation with businesses like Discovery, OUTsurance, MMI and FirstRand.
“Because the South African financial services landscape is changing rapidly due to the rise of new technology, dynamic regulatory environment, increased cyber security risks and a different type of consumer, we need entrepreneurs who can respond to these changing dynamics and build these businesses of the future.”
“AlphaCode can help them scale their businesses and provides a full range of financing solutions ranging from grant funding all the way to equity funding,” adds Collett.
Sixteen businesses will be invited to pitch for eight places on the AlphaCode Incubate programme in partnership with Merrill Lynch South Africa and Royal Bafokeng Holdings. The final eight businesses will complete a customised 12-month programme and will benefit from an entrepreneurial package worth R2-million each.
The package consists of R1-million in grant funding, R1-million worth of support including mentorship, monthly expert-led sessions, exclusive office space in Sandton, marketing, legal and other business support services as well as access to RMI’s networks.
Previous participants comment on the programme
Siya Ntutela of Invoiceworx provides inventory finance to spaza shops: “AlphaCode helped us with finding our product market fit and connected us to the first Rand Group of companies. We now have a contract with one of them. The funding assisted us in building our technology and hiring staff. We have opened two new depots, we employ 40 people and service over 700 spaza shops.”
Shane Curran of Investsure which has created insurance that protects shareholders from share price losses caused by management misleading shareholders: “AlphaCode brings together like-minded individuals. We build relationships and follow each other’s journeys, making introductions where we have connections, learning from each other’s experiences and sharing common frustrations.
“The funds helped ease our financial burden and made other funding easier to obtain. It gave us time to complete our system and to convert from a pre-revenue business to a revenue generating business,” says Curran.
Neo Ratau, CEO of Everest Ventures which helps build businesses through capital, strategy and access to markets explains that the association with AlphaCode and RMI gave the business a boost.
“When you are part of AlphaCode, suddenly, more people listen. There is also a network of professionals to support us with critical services such as legal and business coaching, which goes a long way.
“The funds were a game changer, they bought our business time – time to build our business development engine, improve the quality of our offering, research the macroeconomic environment and learn all we need to in order to enhance our products to be competitive,” says Ratau.
Sanam Thakoor of CommuScore which uses stokvel regular payment behaviours and patterns to create a credit score that can be used by banks to build a credit profile for the financially excluded said, “We’ve been able to create employment for young individuals who would like to get exposure to the startup journey and expand their horizons.”
Obakeng Moepya, co-founder of Isazi Consulting, an artificial intelligence and optimisation company, said that their service offerings have been provided to subsidiaries within the First Rand Group.
Collett explains that the Incubate programme will deal with common challenges that financial services startups face.
“The biggest is navigating SA’s well developed legal and regulatory framework. The programme will be solving this specifically by partnering with legal and regulatory experts and helping businesses understand what licenses they may need, applying for them and staying abreast of a changing regulatory environment,” says Collett.
“Another challenge is the business development and commercialisation dilemma. It is very common for the business to have a great idea or product but is unclear of how to monetise or distribute it.
“Often, these businesses require large bank or insurer partnerships to scale, but navigating these partnerships is tricky. We will help by actively facilitating conversations with our broader portfolio including OUTsurance, Discovery, FirstRand and MMI and we will be working with ‘super coaches’ who can help the businesses correctly frame their value proposition to make sales,” she adds.
The businesses being sought for AlphaCode Incubate are led by entrepreneurs with innovative financial services business models in segments such payments, insurance, savings and investments, advisory, data analytics, blockchain.
They are early stage concepts or businesses not more than two years old with entrepreneurs who will make a success. The business must be at least 51% owned and managed by black South Africans.
Last year, AlphaCode received over 30 applications. A shortlist of 10 black-owned businesses pitched their business to a formidable panel of judges. Four of the 10 businesses received R1m each in grant funding.
Collett continues, “Because we have substantially raised the bar and the funding this year, we have already had 90 applications.”
Since inception of the initiative three years ago, 15 black-owned businesses have received R13m in funding and most of the businesses are live and generating revenue. “Some have experienced exponential growth and we have been amazed at the level of traction they have received both locally and internationally,” concludes Collett.
The first round of applications closes on 7 September 2018 and the programme will begin on 1 November 2018. Apply at www.alphacodeincubate.club
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