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Cape Town edtech startup Digemy may be celebrating after having raised R1-million at a R40-million valuation in a second funding round with Greenwold Capital. It follows R2-million that the funder invested in the startup in 2017.
But the news has been overshadowed by the departure of co-founder Carl Wallace, who Digemy CEO and co-founder Kobus Louw (pictured above) revealed yesterday had been replaced on the startup’s board by an investment representative after being diagnosed with lupus and Crohn’s disease.
Digemy was founded in 2016 by Wallace and Louw. The startup’s platform provides corporates with in-depth insights into the knowledge levels of employees, from course-level to the most granular level of every syllabus. Training material is delivered in bite-size chunks.
While Louw told Ventureburn in a call yesterday that the deal was concluded last month, he said effective from 1 September, Wallace was replaced on Digemy’s board by Stocks & Strauss director and co-founder Wayne Stocks, who has previously helped SA tech startup JUMO to expand in East Africa.
While Digemy has raised R1-million at a R40-million valuation, co-founder Carl Wallace has had to leave the startup after contracting a long-term illness
Louw said the departure of Wallace — who took care of the technical side of the business, while Louw oversees business execution — had not been easy for him.
“I’ve had to educate myself very quickly on the tech stack in the business,” he added. “Now you have all that responsibility, but the question is can you sustain that.”
Following the latest investment, he said Greenwold Capital now holds a slightly smaller stake, of 24.4%, while he holds a 48.9% stake and Vigo, which allows users to create their own websites, holds the remaining 26.7%.
Louw said the funding from this second round will be used to expand the Digemy team, launch the besmarta financial literacy platform, and to pursue entrepreneurial development.
‘Grown five times in 18 months’
Despite the disruption around Wallace’s departure, Louw said the startup had signed four listed companies as clients, and had grown its valuation five times in the last 18 months. It has also just finished a proof of concept with one of the top banks in South Africa.
While he could not reveal who the bank was, he said the listed companies include pharmaceutical giant Cipla and Transaction Capital’s software firm Principa. The startup is currently working to conclude a deal with Deloitte too, he added.
Last year, Digemy placed in the top five for the Best Enterprise Solution at the AppsAfrica Awards, won an MTN Business App of the Year award for their besmarta financial literacy solution, and has now been named the second best tech start-up in Africa in 2019, according to Africa Tech Week.
The company has also partnered with Kevin Horsley, New York Times best-selling author and the World Record Holder for the matrix memorisation of 10 000 digits of Pi.
Through this partnership, the startup hopes to develop and launch an app that helps children memorise times tables.
Rolling out besmarta platform
Digemy is currently partnering with corporates to roll out its besmarta platform in their organisations.
The platform provides learners with access to microlearning modules and quizzes on financial literacy that aim to decrease financial stress and help them gain financial independence.
The startup is also helping organisations to create their own online academies to assist in employee and consumer education solutions. They also create specialist courses and offer their platform as a SaaS solution.
Editor’s note (12 September 2019): Digemy CEO and co-founder Kobus Louw told Ventureburn in a subsequent call that Carl Wallace’s stake was held by Vigo and was not in Wallace’s name. Vigo which has two tech subsidiary companies — Digital Drawing Room and Wapp — is owned by Wallace.
Louw also added that Digemy has yet to finalise an agreement with Deloitte.
Featured image: Digemy co-founder Kobus Louw (Facebook)