2019’s sure been a year. For South Africa, that means extreme highs and depressing lows, but one things for sure, the country didn’t stop…
He may have closed one of the biggest deals ever in South Africa’s tech startup sector, but GetSmarter co-founder Rob Paddock admits that he “burnt himself into the ground” getting there.
He and his brother Sam, who together started Getsmarter 2008, sold the Cape Town based education platform for a whopping $103-million plus $20-million in cash to US company 2U in 2017 (see this story and this one).
But he said the excessive “non-stop” travelling — where he easily spent three-quarters of a year visiting top universities in the US and Europe in a bid to sign them up to the edtech’s platform — left him exhausted all the time.
“I burnt myself into the ground, like too many years of absolutely killing myself,” he told Ventureburn in an interview yesterday.
Working himself to the bone to grow Getsmarter left Rob Paddock exhausted all the time
“I’ve got a wife who I love and dogs and hopefully kids one day, and it was putting a lot of strain on that and it puts a lot of strain on your friendships and your family relationships,” he said.
But nine months after the completion of the transaction when he stepped out of the office for the last time at the end of March last year, Paddock said he was faced with another challenge — what to do with the rest of his life.
“It’s kind of a crazy thing when you’re in your mid-thirties and don’t need to work anymore,” he said.
He said the time has freed him up to pursue things he never had the time to do more of, such as Ironman challenges, meditation, spending long overdue time with his wife Ash and even some psychotherapy.
“It was just a joy to do a lot of exercise and walk on the mountain every morning and see who I was outside of Getsmarter, because Getsmarter had come to define a lot of who I was,” he said.
Paddock’s new virtual school
During the break he began to realise that he had a lot more to contribute still.
His latest startup Valenture Institute, which he began working on in December last year, is an entirely online school — for high-school students (grades 9 to 12) which is aligned to the UN’s Sustainable Development Goals. The company’s marketing site was launched on 3 September.
He’s already brought together a team of 27 people and has ploughed in millions of rands of his own money and that of his investor Lebanese born American Samer Salty, who helped fund Getsmarter to the tune of $5-million through a subsidiary called DiGame. Salty is the founder and managing partner of Zouk Capital.
The first cohort is expected to start in January next year, with learners initially drawn from the UK, South Africa and neighbouring countries.
Paddock wouldn’t reveal how many learners the school will take on. He said fees would be comparable to local private school fees or about $5000 a year, but added that the hope is that the institution will be able to offer a number of bursaries to under privileged children.
The plan he said is to educate 100 000 students over the next 10 years.
No big homes, fancy cars or yachts
So, what did he do with all the money from Getsmarter’s over $100-million acquisition by 2U?
It wasn’t spent on buying a yacht or a really big mansion and not on any fancy cars, that’s for sure, he said.
He claims he and his wife drive a “very modest car” and have a home in upmarket Oranjezicht that they bought before the 2U acquisition.
His biggest purchase he says was a holiday house in Scarborough, a seaside hamlet near Cape Town where he and his wife married. He declined to say what the value of the home was, except to say that it is a “nice enough place”.
Much of the money went to charity. He said he gave away a large chunk (he won’t say how much) to various social causes that he and his wife help out on in mainly in the arts, education and medical sector, with most of these in the townships.
“Of everything that has happened, I would say the highlights are getting the holiday house and giving a bunch of it (money) away,” he said.
Cash option because of exchange control
He said the acquisition ended up as an all-cash deal, rather than a mix of shares and cash as is usually the case in such a deal.
This was to ensure the two were not out of step with exchange control rules, under the double-loop system — where South Africans are prohibited from owning equity in a business overseas that then owns equity in a SA business.
He said the all-cash option was great as it meant that the proceeds from the acquisition weren’t dependent on 2U’s share price.
His brother Sam left Getsmarter in June last year and has been involved as an angel investor since leaving. “He’s invested in a few local businesses (Rob Paddock said he would prefer not to say which ones — Ed) and is helping them to scale effectively,” said Paddock.
Meanwhile Getsmarter is still growing. Over two years on following 2U’s acquisition, the company has 700 to 800 people, about double the staff complement it had at the time of the acquisition.
Now while he settles into his new startup, the question on most minds will be — will this be another $100-million company in the making?
Featured image: Getsmarter co-founder and founder of Valenture Institute, Rob Paddock (Supplied)