The internet is not the only place to find good businesses to invest in, even for a tech investor, as Silvertree Holdings hopes to attest to.
The Cape Town based investment company — which has invested in a string of ecommerce companies since launching in 2013 — announced in a statement on Tuesday that it had invested an undisclosed amount in its first non-tech company, SA skincare brand Skoon.
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Silvertree was founded by Paul Cook, Manuel Koser (pictured above, far right with fellow members from Silvertree and Skoon) and Peter Allerstorfer (all three jointly hold the position of managing director).
Its current portfolio includes 11 firms in which it has invested in since 2013. They include among others Pricecheck, Ucook and CarZar.
Silvertree has made its first investment in a company that isn’t a tech firm, since undergoing a rebrand earlier this year
In June Silvertree sold its stake in CompareGuru to online insurance distribution company SureStart (see this story). The value of the sale was not disclosed by either party. It was Silvertree’s first major exit from a SA investment — previous exits, according to Cook in June, had been “for less than R10-million”.
No more ‘internet’ in Silvertree Holdings
The Skoon deal is the investor’s first investment in a company that isn’t a tech firm — since it dropped the “internet” in Silvertree Internet Holdings earlier this year.
Silvertree’s rebrand, executed earlier this year allows it to expand their portfolio from predominantly investing in the ecommerce space, to now moving into the consumer space, the company said in a statement yesterday.
Cook told Ventureburn by email that Silvertree’s rebrand doesn’t mean the investor will now be “investing in all kinds of businesses now”. The focus he explained will remain on building disruptive tech and consumer brands.
“Dropping the ‘Internet’ part of the name helped get over the hurdle of potential entrepreneurs thinking we only did ‘hardcore’ tech/internet,” he pointed out.
He explained that in Silvertree’s early days the focus on tech formed a big part of building disruptive tech and consumer brands, but stressed that the investor’s strength and focus has always been on the “brands, not the tech for its own sake”.
“Skoon fits great here, as it’s (an) omnichannel through its own and other channels, with great synergies with existing portfolio members (Faithful to Nature), and strong brand.
“That’s the sort of investments we will continue to do, with varying amounts of tech vs consumer for each investment. So don’t expect investments in heavy manufacturing or mining or B2B IT maintenance contracts, etc — we’re focusing on strong tech and consumer brands,” he added.
‘Ecommerce still growing at over 20%’
Koser explained what brought about the rebrand earlier this year.
“We had Freddy Caspers (Silvertree’s non-executive chairman) as well as Thandi Mbulaheni (Silvertree’s head of marketing) join our team over the last one to two years and with this we got the right skill set to also look at disruptive consumer brands.
“Peter (Allerstorfer), Paul (Cook) and I always thought this would be a good idea given the traction we saw brands had on our platform Faithful to Nature and we thought we could help them across all distribution channels, with growth capital, expertise and network.
“Ultimately we want to build brands and connect them via technology to the (South) African consumer so just an extension of the strategy as businesses like Ucook, Faithful to Nature, Petheaven (all Silvertree investments — Ed) are ultimately consumer brands.
So, does widening the focus away from just tech mean that growth in the ecommerce sector is flagging?
Not at all, says Koser.
He says the market for ecommerce is still growing “at 20% to 30% organically” and that Silvertree’s portfolio companies are growing at a “multiple of that”.
Koser added that Silvertree is still aiming to list of sell its investment portfolio by 2023. “We are still aiming for a liquidity event of Silvertree in 2023. Yes,” he said.
The question is, how many will be tech businesses?
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Featured image (from left to right): Clayton Wiggill (Silvertree Holdings), Stella Cioli (Skoon), Emma du Plessis (Skoon), Elize du Plessis (Skoon), Thandi Mbulaheni (Silvertree Holdings) and Manuel Koser (Silvertree Holdings) (Supplied)
