Green machine closes VC deal after pivot from vending solution to tech platform

After a year of running their vending machine business Gideon Greaves and Chad Knezovich were at a loss at what to do. Greaves had sold his car and the two had yet to draw a salary. Greaves’ cellphone account was bouncing.

Few corporates or organisations were taking to their two expensive R80 000 vending machines that were fast depreciating. Maintenance costs were building up and just to replenish the machines the two had to at times contact security guards to get access to the machines.

Until the Cape Town entrepreneurs, who are old school friends, were introduced through their network to Christoff Albertyn, the technical creator behind the WeChat Wallet and VOOVTV.

In return for a 7.5% sweat equity stake, Albertyn — who currently serves as Tencent Africa’s chief technology officer (CTO) — has helped develop the Green Machine tech platform. He also joined their team as CTO.

Green Machine’s investment from Acorn Private Equity was ‘less than R10m’

The platform has automated the buying and selling of their green foods and snacks products. Orders are automatically placed to replenish low stock, without the two needing to get involved. Similar to how Amazon shows users products they may be interested in, the platform can also up-sell certain green goods to clients.

And it’s paid off.

Sales have taken off — having grown by 148% last year and expected to increase by over 100% this year. The company now services 403 sites for a number of schools, top corporates such as Standard Bank, Discovery and Vodacom and universities such as UCT and Stellenbosch. The two have also been able to hire four employees.

Acorn Private Equity deal

And on 27 June the two inked an investment deal with Acorn Private Equity.

While Greaves (pictured above, right) would not disclose how much Acorn Private Equity had invested in the company, which he founded in 2016 with Knezovich (pictured above, left), when pushed to reveal a ballpark figure he confirmed that it was under R10-million. Greaves and Knezovich still own a majority stake.

The investment will fall under Acorn’s newly formed Acorn Health Food Group, Greaves said.

The two aim to use the investment to expand their operational team to Johannesburg and to build onto the front end of their tech platform. Currently the company has a team of six.

Greaves says the startup will open a new warehouse in Johannesburg next month near OR Tambo International Airport.

Currently all deliveries are couriered from the company’s Cape Town warehouse in Capricorn Park, near Muizenberg.

The startup currently outsources warehousing and delivery of its goods. Greaves admits that the company is giving away some of its margin as logistics companies charge an eight-percent fee on the value of any goods they deliver on behalf of the company.

Greaves however says the two have big ambitions. “Ultimately we want to autonomise the distribution industry. We are gunning for Bidfoods and SG Convenience as the healthier more modern offering.”

Featured image (from left to right): Chad Knezovich and Gideon Greaves (Supplied)