Newtown Partners shifts focus to offshore deals amid SA challenges

SA entrepreneur Vinny Lingham’s angel investment fund Newtown Partners has shifted its focus to sourcing deals outside of South Africa because of the poor economic and political climate at home, says the fund’s managing partner Llew Claasen.

Claasen (pictured above), who is based in Cape Town, told Ventureburn last month that while the fund had sourced about 10 of its 16 deals concluded since it launched 2014 in South Africa, he and Lingham are now looking more at deals offshore.

He described the fund’s focus as being on blockchain projects and added that via its US office in Sunnyvale, California the fund is currently looking at deals in Europe and Asia.

South Africa’s venture capital (VC) sector, he added, is for all intensive purposes “dead” as follow-on funding is difficult to conclude.

Newtown Partners has is currently looking at deals offshore, given the current economic and political challenges in South Africa

He said the “10 or 11” SA deals include those sourced from television program’s Dragon’s Den and Shark Tank in which Lingham took part in 2014 and 2016, respectively.

The SA deals include SA startups on demand domestic cleaning startup SweepSouth, fintech Wala and Augmentors which claims to be the world’s first augmented reality blockchain-based mobile game and launched its open Beta at Comic Con Africa late last year.

The fund has also helped capitalise Lingham’s own Silicon Valley based startup, Civic.

Claasen said the fund operates like a family office and doesn’t syndicate deals. Most of the deals are small amounts “before Series-A” rounds, with an average investment amount of R1-million (about $75 000).

He explained that the fund consists of a small group — of about five active angels (all South Africans, most of whom are retired professionals with private equity experience) — but stressed that the majority of deals the fund concludes involve only himself and Lingham.

The highest number of angels involved in any one deal, was six, he pointed out.

The fund has had one full exit so far where one of the portfolio businesses was acquired by a JSE-listed firm (Claasen did not say which firm this is). There have also been two “partial exits”, where another partner had bought out some of the fund’s stake in the business.

Read more: Why we invested in Augmentors game – Llew Claasen, Vinny Lingham [Updated]
Read more: EXCLUSIVE: Augmentors reveal launch date of AR, blockchain mobile game
Read more: Five SA angel investors you want to meet
Read more: Local blockchain-based AR game nears funding goal
Read more: SA startup Wala wins $100k Zambezi Prize for Innovation in Financial Inclusion
Read more: Wala ICO nets just 4% of $30m target, but Newtown Partners praises result
Read more: SA to ‘highly benefit’ from Wala, Dala, FincomEco, BLCC partnership – Wala COO
Read more: Q&A: Wala CEO on tackling financial exclusion in emerging markets
Read more: Fintech startup Wala secures equity investment from Newtown Partners

Featured image: Newtown Partners managing partner Llew Claasen (Supplied)