UPDATE (14 January 2020): While Silicon Valley based SA entrepreneur Vinny Lingham is linked to the LionPride Agility Fund, which secured a 20% cut in MaraPhone’s master franchise — the money invested did not come from Lingham’s VC entity, Newtown Partners.
Lion Pride CEO Deven Govender told Ventureburn in an email today that while LionPride Agility Fund’s class B shares are managed by LionPride and will focus on mature technology aimed at improving the poor — class C shares are managed by Newtown Partners and will focus on disruptive new technologies.
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“Hence Vinny Lingham and Newtown Partners have no direct link to the investments made last year,” he stressed.
A SA fund linked to Silicon Valley based SA entrepreneur Vinny Lingham has secured 20% of the SA master franchise to distribute Mara Phones.
Lingham (pictured above) is the founder of startup Civic and a former judge on TV show Dragon’s Den and Shark Tank SA.
The investment was made through the R500-million LionPride Agility Fund, a partnership between investment house Lion Pride and Lingham’s angel investment company Newton Partners.
The Mara Phone, produced under Ashish Thakkar’s Mara Group, was introduced to SA consumers at a Black Friday event on 29 November at the Maponya Mall in Soweto.
Mara Phone deal is one of three investments totalling about R15m that the Vinny Lingham linked fund has concluded this year
It’s the first smartphone to be manufactured (not assembled) in Africa, with its origins in Rwanda and with a factory now having opened in Durban.
‘About R15m in three deals’
The investment is one of three that the fund — which was launched in January and operates as a Section 12J fund, which falls under the SA Revenue Service’s (Sars) VC tax incentive — has made this year, Lion Pride CEO Deven Govender told Ventureburn. This, after Govender and his team sifted through more than 100 pitch decks.
Govender said today that the investor had signed a non-disclosure agreement with each of the respective investees in terms of disclosing the exact amount that Lion Pride has invested.
However, he was able to say that each deal is worth “roughly R5-million” — which works out to the fund having invested a total of about R15-million in the three deals.
Nedbank is first channel partner for phone
In a letter to be sent out this Friday (13 December) to investors, Govender said his team is looking forward to working with its partners Ivory Chalice and LionPride Investment Holdings to roll out “this wonderful, feel good project”.
He said the plan is to look at market channels and individual franchises, adding that first channel partner is Nedbank, who will offer the phone its customers. He said other key partners are being identified.
“For individual franchisees, the plan is to have 100 stores in the above format. Agility is working with financial institutions on the funding for franchisees,” he said in the letter.
The fund has invested in two other deals — a 45% of digital platform Simuka which is at a pre-revenue stage and a 30% stake in Onsite, which provides on-demand maintenance services to kiosks and point-of-sale devices.
Simuka
Simuka claims its platform curates essential online services for communities and provides unlimited access at a fraction of usual mobile data costs.
In the letter to investors, Govender said revenue is generated from month-to-month subscriptions, platform fees from community owners, app and service promotion as well as advertising from brands owners.
For R285 a month (package dependant) using the Simuka App, the user will have unlimited access to the internet.
The platform optimises mobile data costs by intelligently offloading mobile traffic to cheaper fixed broadband, repackaging wholesale mobile data and bandwidth.
“So even when you’re in London, using the app you can surf the net as if you were at home,” he added.
He said the unique model of B2B2C will ensure that large organisations that Simuka contracts with will on-sell to
their customers.
“This again meets the mandate of the Agility Fund, to improve the lives of many South Africans who face many challenges on a daily basis,” he said.
Onsite
Onsite Africa Solutions offers an “Uber styled” platform that will match service providers to devices without the company owning the physical or human resources required to provide the service.
Govender said Onsite, is a form of Studio VC, where the entrepreneur already manages a successful business but had
identified this opportunity as a spin-off.
“The current business is creating the platform and development of the kiosk. Clients include Massmart and Old Mutual, however the need to install and service the kiosk was outsourced to third-party providers.
“These providers undertook this as an additional revenue stream, and not their core business which relocated in the quality of the service.
He said the business has generated cash from day one, as it already has clients.
“We believe this will be a real job creator, as technicians with the app, can get on the platform and offer their services around the country.
“Each technician will have access to basic training to be verified on the system. LionPride is also looking at other devices that can be installed and maintained that relate to energy or power security,” he said.
With these three deals concluded, those in the tech sector will surely be excited to see what deals will be announced from Lingham’s fund next year. For that we can only wait and see.
Read more: Four Sars Section 12J venture capital funds that invest in SA tech startups
Read more: New Vinny Lingham linked R500m VC fund currently mulling 15 investments [Updated]
Featured image: Silicon Valley based SA entrepreneur Vinny Lingham (Facebook)
