Are these the biggest SA tech acquisitions of 2019?

This year saw some pretty big acquisitions in the tech sector.

Most notable were Kenyan company DPO’s acquisition of Cape Town based fintech PayFast and Vodacom’s acquisition of 51% of Pretoria based Internet of Things (IoT) startup up IoT.nxt.

The size of both of the deals were not disclosed, but are likely to run into tens, if not hundreds of millions of rands – or at least over R100-million, in the case of US based CM Group’s acquisition of Adii Pienaar’s Conversio. Pienaar was involved in founding WooThemes, which was acquired by Automattic for a reported over $30-million in 2015.

It’s been a busy 2019 for SA tech companies, with some big exits, including DPO’s acquisition of fintech PayFast

Here then are some of the acquisitions in SA’s tech sector, that Ventureburn reported on this year.

DPO acquired PayFast

Nairobi-based payment services provider the DPO Group in July announced that it had acquired SA payments processing service PayFast in a reported multi-million rand deal (see this story).

DPO Group’s latest acquisition is the fifth that the group has notched up since its inception in 2006.

PayFast was founded in 2007 by managing director Jonathan Smit (pictured above, middle) and Andy Higgins.

DPO chairman Offer Gat (pictured above, left, with – left to right – DPO Group CEO Eran Feinstein, PayFast MD and co-founder Jonathan Smit, Axis Partners MD Nicholas Smalle and DPO PayGate MD Peter Harvey) said at the time that the deal was concluded through a mix of shares and cash.

As part of the deal, the PayFast management team will remain key shareholders in the DPO Group.

It is not clear how much deal is worth. Apis Partners managing director Nicholas Smalle (pictured above, second from right) — whose firm funded the acquisition — described it as the largest acquisition of a payments processing company in South Africa at the time.

The deal is therefore higher than the R100-million that DPO paid PayGate in a merger in 2016 (see this story).

Vodacom acquires IoT.nxt

SA’s Competition Commission in August said it had approved Vodacom’s acquisition of SA Internet of Things (IoT) startup IoT.nxt. The acquisition was approved subject to certain conditions (see this story).

It followed the telecoms giant’s announcement in May that it had reached an agreement to acquire a 51% stake in the startup (see this story).

While neither Vodacom nor IoT.nxt have disclosed the amount the telco paid to acquire a majority stake in the startup, it’s likely to be in the hundreds of millions of rands.

The Pretoria-based startup, which was founded in 2015 by CEO Nico Steyn (pictured above), Terje Moen and Bertus Jacobs, focuses on delivering innovative IoT software and hardware solutions.

Conversio acquired by CM Group

SA entrepreneur Adii Pienaar, who helped launch WooThemes before it was acquired by Automattic for a reported over $30-million, announced in October that his latest startup Conversio had been acquired by the CM Group — reportedly for over R100-million (over $6.7-million) (see this story).

Nashville-based CM Group has a family of global marketing technology brands. The firm generates tens of millions of dollars a year.

Pienaar (pictured above), who founded Conversio in 2014 (it was initially called Receiptful before a 2016 rebranding), made the announcement in a blog post in October. At the time he said his startup would be rebranding to become CM Commerce.

When contacted by Ventureburn at the time, Pienaar, who is based in Cape Town, declined to reveal the amount that his startup was acquired for, other than to say that the figure was a “significant” one and that the startup was generating a multi-million dollar annual revenue before the sale was concluded on 5 August.

However an investor, who took part in a 2015 angel investment round in Conversio of over $500 000 and who asked not to be named, said the startup was acquired for over R100-million.

Pienaar said in October that he would be staying on with the startup’s current 12-member team based in the US, Canada and Europe. “I will still be leading the product and team,” he confirmed.

SureStart buys CompareGuru

In June online insurance distribution company SureStart announced that it had acquired CompareGuru, an independent insurance comparison platform, from SA investment company Silvertree Internet Holdings (see this story).

SureStart claims that it enables anyone to buy or sell digital financial services, instantly and seamlessly, by using the cloud-based Briisk Instant Transaction Platform.

CompareGuru provides free, unbiased side-by-side quotes on short-term and long-term insurance products, ranging from vehicle insurance and life insurance to building insurance.

In a statement at the time, SureStart said CompareGuru — which was founded in 2013 by Ryan Marx with the help of seed money from Silvertree and UK investors Kingsway Capital — had joined the its stable effective from 1 June.

Marx in 2017 exited CompareGuru, selling his 10% stake back to Silvertree (see this story).

Travelstart buys Club Travel Group

Travelstart in June announced that it had acquired Southern Africa’s Club Travel Group for an undisclosed sum (see this story).

The acquisition involved Travelstart wholly acquiring the Club Travel Group and its subsidiaries and the deal was subject to the approval of South Africa’s Competition Commission. The transaction was formally completed and approved in October.

Travelstart said in a statement in October that the acquisition will boost Travelstart’s offering by adding Club Travel’s established complementary corporate and franchise divisions to create one of Africa’s largest, full-service travel groups (see this story).

“We are thrilled to officially welcome Club Travel as the newest member of the Travelstart family,” said CEO Stephan Ekbergh at the time (pictured above).

Touchsides acquired

Johannesburg startup Touchsides revealed to Ventureburn earlier this year that it was acquired by a European company in January.

Two months on, the startup’s co-founder Gary Kaplan remained mum on the name of the firm that had bought a majority stake in his company (see this story).

Speaking to Ventureburn in March, Kaplan — who founded the consumer insights and brand management platform in 2013 with former Blue Label Telecoms colleague David Fraser — said the acquisition, which was concluded in January, was “quite sensitive” and that he therefore could not divulge the details around the deal.

Kaplan however did say that he and co-founder David Fraser would be staying on and retaining a minority stake in the company.

He said the European company had bought out the remaining shareholders, including investors Paper Plane Ventures, which last year invested an undisclosed amount in the startup.

Touchsides uses in-store touchpoints at point-of-sale points and via mobile phones to collect data on consumer behaviour for retailers and brand marketers.

Cortex Group acquires Tesla Water solution

In May, Cortex Group, the holding company of Cape Town based artificial intelligence (AI) startup Cortex Logic, announced that it would acquire Tesla Water’s water quality monitoring solution (see this story).

In a statement at the time, Cortex Logic — which in February announced that it had secured an investment from an undisclosed investor (see this story) — said its holding company Cortex Group was in the process of signing a “definitive agreement” to acquire Tesla Water’s Smart Water Pro solution.

Cortex Logic, founded by Jacques Ludik (pictured above) in 2015, said at the time of the acquisition that the solution would be housed inside Water Mathematics, a stand-alone business that has been operating within Cortex Group since January this year.

At the time Ludik would not disclose to Ventureburn how much Cortex Group would pay to acquire the water quality monitoring solution, but when pushed to comment in an email, he was able to reveal that it was “less than R50-million”.

Founder sells EmptyTrips

Benji Coetzee, the founder and CEO of online trip exchange platform EmptyTrips, confirmed in June that she had exited the business and that the startup had been sold (see this story).

While Coetzee (pictured above) did not say who had acquired the company, Unicorn Capital Partners executive assistant Kayleigh van der Hoff told Ventureburn at the time that the fund — which at the time had a 20% stake in Empty Trips — was exiting the company.

In October 2017 the startup clinched what it claimed is a “multi-million rand” investment from Unicorn Capital Partners, in return for a 20% equity stake (see this story).

Said Van der Hoff in June: “We are jointly with Coetzee in the process of selling our shares in the company”.

The Joburg-based startup, which Coetzee launched in 2017, aims to solve a common challenge that transport companies often face with empty return legs, by leveraging the benefits of the shared economy.

The confirmation came just weeks after Coetzee accused state-owned enterprise Transnet Freight Rail (TFR) of killing a R47-million a year cargo contract that the logistics startup had signed with brewer AB-Inbev.

At the time TFR claimed it pulled a cargo load of beer the startup was handling because of technical reasons, Coetzee believes more sinister motives were behind the state-owned enterprise’s decision to pull the load at the last minute (see this story).

Fincheck buys Funding Hub

Fincheck — a SA startup that allows consumers to compare financial services products — revealed in August that it had taken an undisclosed minority stake in FundingHub and had also assumed full management of the platform (see this story).

A statement by Fincheck at the time claimed that the transaction makes Fincheck the country’s biggest financial comparison site as well as the biggest lead aggregator having signed on 71 banks, lenders and insurers.

FundingHub helps refer South African small businesses looking for finance to 30 alternative lenders and banks.

Neither Fincheck CEO Michael Bowren (pictured above) nor FundingHub co-founder Marilynn Leonard — who is from Xpertek Group, the company that founded FundingHub two years ago — would disclose the value of the transaction or size of the stake that Fincheck has taken.

However, Leonard was able to say that based on agreed milestones it reaches, Fincheck will be able to increase its stake in FundingHub.

TCapital acquires Daily Dish

TCapital, a Norwegian private equity group announced last month that it had acquired Daily Dish, a meal kit delivery startup based in Cape Town (see this story).

TCapital founder Geir Tellefsen (pictured above) said in a statement at the time that Cape Town based Daily Dish had merged with TCapital’s healthy dinner delivery, Day to Day. The merger was effective from 24 November.

Daily Dish and Day to Day would operate now, under the name “Daily Dish”, he said at the time.

Daily Dish, which was founded in 2012 by Diane de Villiers and Jo-Pierre Lerm — much like its competitor UCook which is 50% owned by SA investor Silvertree (see this story), offers to deliver fresh ingredients or home cooked meals to customers.

Charles Back, the owner of Fairview Wine estate, had a 33% stake in the Daily Dish, according to Lerm.

The merged business of Day to Day (which Tellefsen claims is South Africa’s second largest meal kit delivery company) and Daily Dish will have more than 10 000 customers in South Africa on its book, he said.

Tellefsen also told Ventureburn at the time that De Villiers was “actually very sick now” and that it is “terminal” and that she would “not be able to take calls”. When contacted, her office confirmed that she was too ill to take calls.

When contacted Lerm would not comment on whether De Villiers was indeed terminally ill.

Read more: Norway’s TCapital acquires SA meal kit company Daily Dish
Read more: Adii Pienaar sells Conversio in reported over R100m deal to major US company
Read more: Fincheck acquires stake in FundingHub, takes over management of platform
Read more: Competition Commission approves Vodacom acquisition of SA startup IoT.nxt
Read more: DPO acquires SA’s PayFast in reported multi-million rand deal
Read more: Empty Trips founder confirms exit and sale of her startup [Updated]
Read more: Silvertree exits CompareGuru in sale to SA’s SureStart
Read more: SA’s Travelstart to acquire Club Travel Group
Read more: AI startup Cortex Logic’s holding company to acquire Tesla Water solution [Updated]
Read more: Instore data insights startup Touchsides acquired by European firm
Read more: SA founders who’ve sold their startup to a Silicon Valley firm
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