SA Venture Capital Strategist

BetTech Secures Multi-Million Rand Investment From 4Di Capital

2010-03-31T12:17:00.000-07:00

South Africa-based BetTech Gaming (Pty) Ltd was founded in 2009 after years of research and conceptualization by the founders and has since secured a multi million rand investment from 4Di Capital. “We are delighted to have 4Di Capital on board as our long term partner in this project – not only for their ability to provide a capital investment for our software development plans and operational setup but also because they are able to leverage off of their global network to assist in introducing BetTech Gaming and its products to the broader market. We feel that this is where the real long-term value will be added,” says BetTech director Mark Bosman.

BetTech Gaming (Pty) Ltd is focused on developing cutting edge gaming software, with the first product being its sports book package. BetTech is entering the South African market through licensing its sports book software to power upstart brand BET.CO.ZA’s web and mobile interfaces. BET.CO.ZA has the vision to become the premier online and mobile sports betting brand within South Africa and BetTech’s Sport Book software functionality advantages will enable this to happen.

The BetTech Sports Book package will be a fully integrated and certified software platform that will be developed using cutting edge, robust and scalable technology. The system will be a full packaged solution, with all functions managed through one interface, from risk management and reporting to event management and marketing including a unique system focused on affiliate and white label functionality. There will be no need for plug-ins of any kind down the line.

“In my opinion, most of the gaming related software platforms available in South Africa are faced with legacy type issues. They are outdated and are having to regularly redevelop and re-engineer to ensure that they keep abreast of market demand,” says BetTech director Jesse Hemson-Struthers. BetTech is confident that it will be able to work with its development partners in producing cost effective and future-proof products, such as its sports book package, which will fill a definitive gap in the market through being built for today’s punters – with the focus on having flexible and modular betting channels including web, mobile and call centre.

The vision is that once BetTech’s Sports Book software infrastructure is in place, BetTech will leverage off of this South African setup and expand into other rapidly developing sports betting markets such as India, South America and Asia, turning it into a globally relevant, South African company.

http://www.bettech.com/

Aurik secures access to R100m in funding for early stage investments

2010-01-28T09:50:00.000-08:00

Established early-stage growth companies are due to receive a funding boost following news that Aurik Investment Holdings (Pty) Ltd has secured access to a R100 million funding pool.

Aimed at early-stage businesses and focused but not limited to the energy, clean technology, telecommunications, healthcare, manufacturing and agriculture sectors. Funding may be provided in a mix of debt and equity and is available from a minimum of R5 million to a maximum of R10 million per investment.

“This fund is dedicated to early-stage businesses and includes both funding and direct commercial support as part of the deal. South Africa’s bright future depends on reversing the unfortunate situation where we see too few people becoming entrepreneurs and too many entrepreneurs failing,” said Pavlo Phitidis, CEO of Aurik Investment Holdings.

Early-stage businesses face the twin challenges of securing adequate funding and quality commercial support that Aurik hopes to help them overcome. According to Phitidis, “Typically, early-stage businesses are too young to qualify for venture capital and cannot afford consulting-based commercial support. This “skill and equity gap” has proven to be the death knell of many an entrepreneurial dream.

Phitidis added that combining angel funding and business acceleration addresses the major risks typically faced by early stage businesses and boosts the likelihood of entrepreneurial success.

As a Business Accelerator, Aurik partners with entrepreneurs to accelerate the growth of early-stage businesses by providing a combined package of back-office support, business acceleration and angel funding, all before the venture capital stage. Business Acceleration is a new concept in South Africa and is better known in the USA and Europe. Since inception, Aurik has worked with 22 early-stage businesses and enjoyed successful acceleration outcomes.

The funding pool’s target is entrepreneurs running businesses not younger than two years and the entrepreneurs must have at least three years additional experience within their industries. Certain minimum turnover requirements apply while funding is conditional upon the conclusion of a back office support agreement, amongst other conditions.

On the structure of the funding pool, Phitidis explained that the fund is a draw down fund meaning the money is drawn down upon investment committee approval after the conclusion of a successful due diligence process.

Established in 2003, Aurik Investment Holdings is a Business Accelerator that interacts with influential private and public policy makers in order to create a socioeconomic environment conducive to accelerating the growth of early-stage businesses. Aurik partners with entrepreneurs of early-stage businesses to reduce risk and increase focus and direction to develop the business into an asset of value. By providing hands-on business support, back-office support and angel funding all before the venture capital stage, Aurik rapidly develops early-stage entrepreneurs into goal-directed business leaders able to successfully grow and manage their own businesses.

More details about the acceleration application process is available at www.aurik.co.za

Venture capital request

2009-11-13T23:04:00.000-08:00

Hi guys

One of our members is seeking some short-term financing for a vehicle leasing business.

Minimum financing lot size - R100k.

On R300k they are paying prime plus 4% - repayable with bullet payment in 3-months or 6 months up to 500k at prime +4% bullet repayment.

This is neither an offer, solicitation or recommendation from me - it is public service announcement to try and assist our community. If you would like further information please e-mail me (marc@rival.co.za) or contact me on 082-561-1585 and I will put you in contact with the entrepreneur.

Regards,
Marc Ashton

McCann Worldgroup SA assists micro enterprises

2009-10-13T21:34:00.000-07:00

South African micro entrepreneurs in the communications industry now have an opportunity to fast track their businesses to the next level by entering the McCann Worldgroup SA enterprise development initiative, ‘The Kiln’ which was launched early in October.

Announcing the programme in Johannesburg, Reinher Behrens, Group Chief Executive McCann Worldgroup SA, said that five micro enterprises would be selected to run their businesses from The Kiln. “Three of the five businesses have been selected and taken up residence in The Kiln,” Behrens confirmed. “We have started the search for the last two micro enterprises by launching a competition, in which we ask entrepreneurs to motivate why they should be considered for this project.”

The selected enterprises will get rent-free office space, IT infrastructure and support, basic financial services and assistance as well as mentoring valued at R300 000 for each enterprise, for a maximum of 18 months: “It’s then time to let them soar.” Behrens says that besides the direct overhead savings for the businesses, McCann gets a packet of hours per month from each business, in their areas of expertise; giving the micro enterprises exposure to mainstream business and further possible opportunities.

“We have created an environment which allows the entrepreneurs to be integrated into the communications industry. They get invaluable exposure and experience through McCann and our strategic partners. At the same time they can develop their own networks and skills, which should go a long way to contributing to their sustainable success,” Behrens says. “It has to be said that we do not take ownership of the enterprises, it is merely a vehicle to assist them in building their businesses.”

Competition For that entrepreneur looking to break into the world of communications, the core of the project is a website that contains all the relevant information and is the main channel to enter the competition. The competition is fairly straight forward. “We call on entrepreneurs to motivate why they should be considered, either by posting a cellphone-created video clip, or completing an entry form.”

Entrants will be encouraged to get their existing networks to vote for their motivation via the website. Weekly finalists will be profiled on the website and evaluated by an expert panel, made up of McCann and its strategic partners, to select the final winners which will be announced in November. The website will also feature blogs and updates from the other entrepreneurs involved in the Kiln, profiling work completed and sharing their experiences and thoughts on the project.

What VC firms in Cape Town are getting right

2009-09-17T14:03:00.000-07:00

ONE of the regular complaints I hear as a financial journalist is that South Africa doesn't have a culture of investing in start-ups or promising entrepreneurs.

And yet venture capitalists argue there simply aren't enough businesses in which to invest; that they are crying out for investment opportunities.

Read the rest of this column on Fin24.com

UK start-ups face VC crisis...

2009-09-15T21:15:00.000-07:00

Just 319 million pounds have been raised this year for venture investments in the U.K. In all of 2008, funds raised more than 1.3 billion pounds for start-up investments, according to BVCA. The number of deals completed by investors has also fallen to 91 for the first six months from 168 for the same period in 2008. The number of deals completed has dropped in the last four quarters.

Read the rest of the story here on Bloomberg

First project

2009-09-03T14:40:00.000-07:00

Hi guys

Thanks to those who took the time to join the Rival Pioneers Facebook group.
I’ve got some good news - we’ve got our first Entrepreneurs Focus Group (EFG) lined up for October and its a goodie.

The idea behind the EFGs - which we are aiming to run at least once a month - is to provide a platform for entrepreneurs and innovative thinkers to troubleshoot challenges facing a business, exchange ideas and ultimately build a professional network.

We’re kicking off in October with a start-up financial services business which is affiliated to the Johannesburg Stock Exchange (JSE). We are looking for 20 participants in Johannesburg to spend 3 90-minute sessions discussing strategy and product development for this business.

Dates and venue to be confirmed next week but will be within 20 minutes of Sandton either which way. It will be an evening session - 6pm to 7:30pm.

There are no pre-requisites for signing up for the EFG but we are looking for entrepreneurs who are focused on developing themselves and want to contribute.

If your idea of learning is to sit back and listen to others talk then this is not for you - if you want a funky, informative couple of sessions to test your brain then you’re coming to the right place. Think of it like The Apprentice - only a little classier and you don’t get fired!

We also are aiming to have our electronic learning platform up and running for the participants to be able to exchange ideas beyond the focus group.

Delegates who complete the three sessions will receive:

An attendance certificate
Access to e-learning platform
A fantastic opportunity to network

In the meantime - if you’d like to register your interest for the EFG please drop me an e-mail (marc@rival.co.za) with name, e-mail address and a cellphone number and we’ll confirm venue, dates and times.

If you have a business or business concept that you would like a team to troubleshoot then feel free to drop me a mail as well.

Our blog should be up and running some time next week and I’ll post a link to it but in the interim you can follow us either via the Facebook group or via Twitter: http://twitter.com/rivalpioneers

Cost

Zip, zilch, FREE, Mahala…
… yip that’s right - there is no charge to participate in the group. We want people sharing ideas and we want you telling everyone else about this cool entrepreneurship initiative so that by the end of the year we have a couple hundred young professionals vying for places on one of our EFGs and taking these skills out into the workplace.

Look forward to hearing from you!

Regards,

Marc Ashton

Absa ups lending limit to SME's

2009-08-29T01:21:00.000-07:00

As part of its commitment to shore up SMEs, especially those who do not have sufficient security to qualify for finance, Absa Small Business has increased its Khula lending limit for start-up businesses from R100 000 to R350 000.

"This is a confirmation of our unwavering pledge to meaningfully promote start-up small businesses. We are undoubtedly committed to government's agenda of developing SMEs to counter the challenge of unemployment," says Faisal Mkhize, Managing Executive - Absa Small Business.

In addition, Absa Small Business has appointed Khula specialists - who will be based in the respective Absa regional offices - to assist with the application process, management of existing Khula relationship as well as reviewing of existing.

Khula specialists will maintain a close relationship with the Khula regional offices and assist growing Khula business in the geographical areas identified by Khula for growth opportunities such as Northern Cape, North West Province, Free State, Limpopo and Mpumalanga.

Absa has been investing efforts on operational and risk efficiencies within the Khula sphere, during 2008. With these efficiencies now embedded, there is a renewed focus on growing Khula business in Absa from 2009 onwards.

"Starting a small business involves more than financing, as it also encompasses proper processing and strict follow ups on applications; shortening the turnaround and speeding up the entire process," stated Mkhize.

He concluded that their Khula specialists will help them to manage the application process by doing pre-assessments on all applications. "They will also provide advice and related assistance to applicants."

The Khula Credit Guarantee Scheme was established eleven years ago to facilitate access to finance for people wishing to start/buy a small to medium-sized business, but do not have sufficient security or collateral to provide to the bank in order to secure a business loan. In such
cases, where a client meets the relevant requirements, the bank will apply to Khula for a guarantee which then acts as collateral for a specific percentage of the total loan amount. Absa has supported this scheme over all these years.

New partnership to grow SMMEs

2009-08-27T20:34:00.000-07:00

Existing and aspiring entrepreneurs received a positive boost following today's announcement of the partnership between Seda, the Masisizane Fund and Old Mutual Foundation, which aims to provide small, medium and micro enterprises (SMMEs) with non-financial and critical financial support.

The partnership is a timely intervention that will alleviate the plight of enterprising unemployed people who want to start businesses. According to a 2008 Department of Trade and Industry survey, at least 65% of jobs created in the South African economy can be attributed to the SMME sector.

The partnership specifically focuses on stimulating job creation and ensuring sustainability within the small, medium and micro enterprise sector by promoting, supporting and developing SMMEs as well as connecting these enterprises to critical financial support.

Each partner contributes a different element of expert support to the initiative. Non-financial support services will be provided by Seda, which offers entrepreneurs access to information, advice, mentoring, guidance and tailored training programmes through its national network of 42 branches.

In addition, aspiring and existing business owners can consult directly on business concepts with the business advisors at any one of Seda’s branches.

“We’re very excited about this new partnership which will greatly assist in supporting SMMEs to ensure future sustainability and growth. The financial assistance provided by the Old Mutual Foundation and Masisizane Fund perfectly complements the comprehensive range of support services offered by Seda.

"This partnership reflects our mission to develop and promote small enterprises in co-ordination with other role players, and furthers our vision of offering a holistic support package to SMMEs to enhance their competitiveness,” says Seda’s Chief Executive Officer, Hlonela Lupuwana.

Financial aid will be offered in the form of grant funding and soft loans, provided by the Masisizane Fund and Old Mutual Foundation respectively.

“This partnership means that aspiring entrepreneurs, preferably women and youth, can approach a local Seda branch and be assisted with business plan writing and ongoing mentorship using criteria provided by Masisizane and the Old Mutual Foundation. This will improve their chances of getting access to the funds they need to turn their dreams into reality,” says Charmaine Groves, CEO of the Masisizane Fund.

Groves explains that Masisizane’s overarching objective is job creation through sustainable enterprise development in the second economy, and Seda’s is to provide the tools and know-how for SMMEs, both start-ups and existing businesses.

“Entrepreneurs should enjoy increased success when applying to institutions like Masisizane for funding and other business support.The process of evaluating applications will be shortened, and the long term sustainability of the enterprises improved through the valuable mentorship provided by Seda,” says Groves.

Lupuwana adds that the partnership will go a long way to addressing one of the major current challenges facing SMMEs, namely access to funding.

“Access to services, especially finance, has been a key challenge to aspiring and thriving small businesses. It is beneficial for Seda to form this joint initiative in helping to alleviate this shortcoming in the sector,” Lupuwana concludes.

Rival Pioneers

2009-08-23T14:27:00.000-07:00

Welcome to Rival Pioneers - a South African focused initiative aimed at the development of entrepreneurial talent and helping

the right ideas become long-term sustainable businesses.

The South African government has long held the belief that small to medium sized enterprise would be the only way to tackle rising unemployment in the country - they just forgot a critical aspect - holding the hand of the budding entrepreneur.

Rival Pioneers aims to try and address this issue by providing development resources for entrepreneurs including

- Venture and micro finance
- Mentoring and partnerships including communication, sales, strategy
- Sustainability development
- Strategy development and execution
- SME incubation
- Interactive workshops and forums to develop entrepreneurial talent

Why join the Pioneers network?
Running - or even contemplating running your small business - is scary at the best of times. You're under-resourced and normally stretched in a dozen different directions.

By joining an initiative such as Pioneers, you get to put your small business idea out there and interact with other aspirant entrepreneurs... heck if your idea is solid enough you might even find some funders willing to back you and a kick-ass team to give you the best chance of getting your idea off the ground.

Perhaps the idea of starting a business is a step too far but you want to be able to interact with people who have been there and done that - then here is the place to do it.

About Rival
The Pioneers initiative has been established to operate alongside the Rival Industrial company which was established in 2005. The company has experience in a number of fields including food, pharmaceutical, education, E-learning, and corporate wellness.

Titles published by the business include:

ManufacturingHub.co.za - www.manufacturinghb.co.za - News for the SA Food, Pharmaceutical, Chemical Manufacturing industries
RemSpecED - www.remspeced.co.za - Remedial & Special Education in South Africa
Bunbublog.com - Free blogging platform for South African bloggers
Ferronews.com - Ferrous metals industry news

What are you waiting for?
Join the Facebook group now and follow our Twitter feed at - http://twitter.com/rivalpioneers - and we will update you as the project develops

If you want to get involved on a more hands-on level or you have a business plan to submit for consideration you can send it to me at marc@rival.co.za

Look forward to hearing

Online Chess Business ChessCube Receives VC Funding

2009-08-10T11:02:00.000-07:00

ChessCube has concluded a US$1.25m funding agreement with Venture Capital fund, InVenFin (Pty) Ltd. InVenFin, the VC-focused subsidiary of VenFin Limited, invests in intellectual property-based start-ups with global potential. This transaction brings ChessCube’s total funding to date to US$1.8m.

ChessCube is an online chess site, which allows players of all skill levels to compete and learn chess, while socializing with others. With a potential market of over fifty million active chess players in the world, ChessCube.com has already attracted over 650,000 registered users across 207 countries – making it one of the leaders in the growing online chess market.

Mark Levitt, CEO and founder of ChessCube says, “We are delighted to have InVenFin on board as our partner. Over and above the valuable capital injection, InVenFin gives us access to an international business network, and their team of experts in branding, product strategy, intellectual property management and corporate structuring. This investment allows ChessCube to focus on establishing itself as the world leader in online chess.”

InVenFin’s Stuart Gast says, “ChessCube’s innovative product offering has impressed us, along with the strong team led by Mark. The social gaming space is growing rapidly worldwide, and we believe ChessCube represents an excellent entrance for us into this world. We look forward to assisting ChessCube achieve its aspirations.”

Vinny Lingham, CEO of San Francisco-based Yola.com, was an early investor in ChessCube. “As a keen chess player myself, it is particularly exciting to be part of an innovative chess venture,” said Lingham. “This investment by InVenFin further highlights the potential of Cape Town as the technology hub of Africa – which I like to dub Silicon Cape. ChessCube has enormous potential to dominate the massive global chess players’ market.”

The partnership between ChessCube.com and InVenfin will allow ChessCube.com to become the most recognized and loved online brand for chess enthusiasts.

ChessCube enables all levels of chess players to play live chess against other like-minded players, in various forms of the game. The focus at ChessCube.com is enjoying the game of chess in a positive and fun environment.

ChessCube.com also offers interactive chess videos written by international grandmasters. Unlike DVDs, these videos interact with each user, offering them personalised instruction – an outstanding innovation that earned ChessCube a Semi-final placing in the 2008 Adobe Max Awards in San Francisco.

World history was recently made by ChessCube when, during its recent sponsorship of the 2009 South African Open, along with the 400 participants at a Cape Town venue, for the first time in history three grandmasters and masters participated from a second venue in Melbourne, Australia. FIDE, the world chess federation, worked with ChessCube to ensure that the games, which were played across the Internet, were officially rated, setting a new precedent that could see tournaments using this technology in the future.

ChessCube continues to innovate and build on its award-winning chess playing platform from its Cape Town headquarters.

Useful links

ChessCube website: www.chesscube.com
ChessCube blog: www.blog.chesscube.com

Innovation Exhibition 2009

2009-07-24T17:47:00.000-07:00

The Innovation Investor Exhibition at the Maropeng Conference Centre on the 18 - 19 August is connecting innovators, inventors and investors.

It’s a phenomenal expo for anyone wanting to take an idea to market, network with innovators, anyone looking for finance, or become more acutely informed of the state of innovation and its place in South Africa.

Not only will you expose your brand to the cutting edge of innovation drivers in our country but you have a bevy of guest speakers who will deliver their knowledge in your own exhibitor’s breakaway group. Updates on venture capital; Case studies of entrepreneurs to inspire the most jaded professionals, value of research, (“You cannot improve it if you cannot measure it ‘says Kelvin); Putting a product on the market; Governments’ role in innovation. Enough to keep you enthralled and scrambling for the next speaker while the main delegates are out of your expo space and into the conference seats.

If you’ve been too busy, take a few seconds to book your stand right now It’s an awesome event that you just cannot miss! And it all happens at the Maropeng Conference Centre with its innovative architecture and inspirational setting in the award-winning world Heritage Site, Cradle of Humankind west of Johannesburg.

Read more of this innovation initiative on www.innovationsummit.co.za

PPC and Venture Capitalists

2009-07-11T20:34:00.001-07:00

Pay Per Click (PPC) seems to be the flavour of the moment with South African venture capital firms and I am a little surprised - I thought that the model was pretty mature and wouldn't have presented that many potential opportunities.

InVenfin recently invested in Ad Dynamo and a few months back HBD made a similar investment in another local player. Just find it quite interesting that this is where venture capitalists with quite a good "top-down" view of the industry decide to spend their money... Thoughts?

Nice site

2009-07-09T13:05:00.000-07:00

From the Bad Entrepreneur blog:

If you have even a passing interest in either financing your small business or investing in someone elses idea then I'd like to recommend you check out the InvestorsNetwork.co.za website.

It is a local site which basically serves as a meeting place for entrepreneurs. You can either pitch your small business or meet up with potential investors. The nice thing about them is that they have already recorded 185 registrations on their site - which I would take to mean that they have a bit of a following.

The services they reckon they offer:

* To assist in the funding of emerging ventures.
* To present pre-screened deals to capital providers.
* To educate entrepreneurs on the investor mentality.
* To provide a vigorous meeting forum for all business professionals.

Anyway - let me know what you think of their site and what they have to offer.

Pay Per Click Tech Company Receives VC Funding from InVenfin

2009-07-05T13:23:00.000-07:00

Introduction
Ad Dynamo International has concluded a funding agreement with InVenFin (Pty) Ltd., which sees InVenFin providing venture capital funding to Ad Dynamo in return for equity.

About Ad Dynamo
Ad Dynamo was founded by Entelligence Limited.

Sean Riley takes on the role of Chief Executive Officer of Ad Dynamo, whose head office is in Cape Town. Ad Dynamo operates a pay per click advertising solution, which offers advertisers a cost effective means to market themselves online.

Ad Dynamo has already achieved a notable presence in South Africa, with some key advertisers and website publishers already partnering with the company. Future plans include rollout into International markets and the introduction of innovative advertising solutions that give both advertisers and website owners flexibility and choice.

The Ad Dynamo product offering
Ad Dynamo provides website operators with the ability to earn revenue from advertising on their websites. Any website can place a small snippet of code on their web page which delivers advertising onto the web page and the website owner starts earning revenue immediately. Revenues are shared transparently with website operators.

Ad Dynamo sources advertisers, allowing them to bid on keywords relevant to their products. These advertisements are then contextually delivered to the most relevant web pages, ensuring a non-intrusive advertising experience for users visiting a website, and increasing the likelihood of users interacting with the advertisement since it has contextual relevance to them.

Advertisers enjoy the popular Pay Per Click pricing model, and by setting a daily maximum budget, which manages expenditure, Ad Dynamo welcomes both small and large advertisers alike.

Over and above traditional contextual advertising, Ad Dynamo supports other advertising channels and has recently launched support for MXit advertising.

The Future
Ad Dynamo currently serves ads on over 155,000 unique web pages in South Africa, delivering over 40 Million ads per month. Ad Dynamo has secured a number of key website publishers and continues to expand its presence in the contextual ad delivery market place.

Ad Dynamo is poised to expand its offering on an International scale.

Sean Riley says: “We are pleased to have attracted venture capital funding from a VC fund as highly regarded as InVenFin. Not only do they bring capital, but access to an International business network and huge experience in commercialization. The investment allows Ad Dynamo to introduce its advertising technology into new global markets and to continue innovating its product offering.”

Sanlam Private Equity appoints Fernandez as CEO

2009-06-28T10:56:00.000-07:00

Sanlam Private Equity (SPE), the private equity investment business within the Sanlam Group, today announced the
appointment of Cora Fernandez as chief executive officer. Fernandez will take up her new role in SPE's Hyde Park offices in Johannesburg on 1 July 2009.

With close to R5 billion of assets under management, Sanlam Private Equity is one of the largest private equity fund managers in South Africa, offering both a direct and fund-of-funds investment programme.

Fernandez has held the role of deputy CEO of SPE, heading up the Johannesburg branch of the business, since 1 February 2006. Current CEO, Pieter Kriel who co-founded the SPE business, will step down from this post he has held since February 2006, but will remain actively involved in an executive capacity as co-founder and senior partner.

Says Johan van der Merwe, CEO of Sanlam's Investments cluster: "The move is the implementation of an agreement made between Pieter and Cora, in conjunction with myself, in 2006 as part of SPE and Sanlam Investments'
succession planning strategy. During this time, Pieter has been actively committed to supporting Cora's development while establishing SPE as a key player in the private equity environment."

In the past three years, Fernandez has demonstrated that she has the passion for private equity, the business acumen and people leadership capabilities required for success in the private equity environment. Fernandez is a qualified chartered accountant and served her articles with KPMG in Johannesburg, after obtaining her BCom degree from the University of Cape Town, and a BCompt Honours degree from the University of South Africa. Fernandez entered the private equity industry in 2001,
and in her role as deputy CEO at SPE has been responsible for deal origination, investor relations, investment strategy and portfolio management, as well as manager of SPE's Johannesburg branch.

Fernandez holds many leadership positions in the private equity arena, and is currently chairperson of the South African Venture Capital and Private Equity Association (SAVCA), is a member of the South African Institute of Chartered Accountants (SAICA) and the Association of Black Securities and Investment Professionals (ABSIP). She also currently serves on the Investment Committee of the National Empowerment Fund (NEF) and on the boards of eight companies where SPE owns an interest.

Since joining Sanlam's investment division in 1987, Kriel's contribution to the Sanlam Group has been immeasurable. Kriel has over 21 years of experience in investment management, covering various roles including financial control, compliance, structured products, equity underwriting, portfolio management, the structuring and management of black economic empowerment investments and finally private equity.

Kriel currently serves as a non-executive director on the boards of a number of empowerment and other unlisted companies, and is a member of a number of investment committees and governing and advisory boards of private equity and venture capital funds.

During his leadership of SPE, Kriel recruited a team of top dealmakers and created a strong base for future growth of the business. Kriel fully supports the appointment of Fernandez, saying: "I am pleased to see the plans Cora and I made for SPE come to fruition. I remain committed to SPE and look forward to relinquishing my management duties in order to focus my innovative and entrepreneurial acumen and experience to further grow the business".

Kriel will continue to support Fernandez in her new role and will play a pivotal role in the strategic leadership of the business. Says Van der Merwe: "Pieter is a talented entrepreneur and has pioneered many new initiatives in the Sanlam Group. This move frees him up to apply entrepreneurial thinking to new business ideas and products, and to more actively participate in the investment decision making of SPE. He has established an excellent team and I am confident in their ability to
implement the strategic plans of SPE going forward."

"Kriel represents SPE on many internal and external bodies, such as fund advisory boards, and will continue to drive transformation and mentor skills transfer within the investments businesses", adds Van der Merwe.

Fernandez has played a central role in building the SPE business alongside Kriel, and has gained a reputation as a respected and credible businessperson well placed to position the SPE business as one of the preeminent players in the industry.

"Private equity is my passion and becoming the CEO of SPE is the culmination of many years of hard work alongside Pieter, who has been a skilled mentor to me and other members of the team. I look forward to working alongside Pieter to grow SPE into a formidable player in the private equity space," concludes Fernandez.

Venture Capital - Opportunities in education

2009-06-21T00:22:00.000-07:00

One of the sectors which seems to be seeing a bit of interest from investors again is the South African education sector - specifically in the mainstream and remedial schooling space.

I was fortunate enough to get an invite down to the PSG Annual General Meeting in Stellenbosch this week and it was actually one of the sectors that their investment team were chatting about and one of the places where they are putting their money into.

One of the statistics that they rolled out in their presentation was that at the moment, only 2.5% of South Africans are enrolled in private education institutions - this despite the explosion in new schools over the last few years.

Their opinion is that this figure is likely to continue to grow as the government school sector comes under increasing pressure and numbers in schools continue to expand.

(Bear in mind when reading this post that one of the real tricks in developing an education offering is an ability to develop and manage scale - i.e. what is the "critical mass" that you need to achieve to make a profitable offering).

A couple of areas where I think there might be some promising opportunities for
investors and small business owners to look at are:

Remedial school offerings - The number of small remedial school offerings in the last few years has exploded. My wife is very actively involved in this part of the education sector and she sees the trend continuing as people seek specialist care for children with remedial and special education needs.

E-learning - This is without question one of the most promising but uncertain parts of the South African education landscape. Electronic learning has started to take roots in the universities and one can expect this to continue to evolve as it becomes a more mainstream education tool at all levels

Middle level income primary and high-school offerings - Private education continues to be viewed as a tool for "the rich" but more and more parents in the middle-income bracket are making sacrifices for their kids to receive a higher quality education. I know that there are a couple of schools in this space due to come online over the next few years and might be another area to explore
Basic financial eduction - This is one of the areas which our sideline business has been developing content for the last few years. The demand for basic financial education for your workforce has been further highlighted by the current financial and economic crisis.

I think there are some genuine opportunities in education in South Africa for investors who can get their heads around the sector.

Source: Bad Entrepreneur blog

SME resource

2009-06-20T01:03:00.000-07:00

For SME's looking for a nice resource to assist them in getting started up, you should check out the Small Capital website.

"Partnered by the country’s top providers of three core business services – Standard Bank, MTN and Microsoft – Small Capital shares expert knowledge of the local market and business environment, while providing access to products, services and tools that will help you to turn your small business of today into the powerhouse of tomorrow."

Standard Bank and Microsoft seem to be very active in the SME space at the moment - well done to both these teams for helping out local entrepreneurs.

Evolution One Fund secures ZAR 100 million from first African investor

2009-06-03T20:26:00.000-07:00

The Board of Directors of the African Development Bank Group (AfDB) approved a ZAR 100 Million equity investment in the Evolution One Fund on Wednesday 27th May 2009, the first specialised private equity fund focused on the acceleration and deployment of clean energy and sustainable technologies across southern Africa to mitigate the effects of climate change on the Continent. Evolution One Fund has already raised USD54m in cornerstone capital commitments from four international investors and the AfDB investment will substantively augment this capital pool.

The Evolution One Fund will make equity and equity-related investments in sustainable projects and companies with the aim of not only achieving carbon reductions but also ensuring the sound environmental, social and economic performance of these investments. The Fund will seek to invest predominantly in growth-phase businesses, particularly in eight high-growth sectors namely clean energy/energy efficiency (up to 50% of its investments), efficient and clean manufacturing processes and technologies (“cleaner production”), air quality and emissions control, water quality and management, waste management, agribusiness and forestry, natural products, organics and natural health and environmental real estate. South Africa will account for 60-75% of the Fund’s overall investments, while up to 25-40% will be earmarked for all other Southern African Development Community (SADC) countries.

Climate change is a crosscutting theme for the African Development Bank with a focus on supporting clean energy investments and infrastructure, as set out in the Bank’s Medium Term Strategy 2008-2012, as well as its Clean Energy Investment Framework (CEIF), which underscores the Bank Group’s increased support to clean energy projects. The Evolution One Fund will be the Bank’s first investment in a fund with a specific focus on clean energy and technology investments. The investment therefore supports an innovative vehicle that will boost economic activity in this emerging field, and contribute to the development of sustainable private sector enterprises.

Reinet

2009-05-23T02:05:00.000-07:00

I had been meaning to blog about Reinet earlier this week and then got swamped with other stuff.

Upfront I need to remind you that my primary reason for buying shares in private equity firm Reinet was a desire to get some access to the Rupert family's "deal-flow" and their ability to spot good investment opportunities and generate a return for shareholders.

I got in quite cheaply so I am up a few bucks on this investment but it was interesting to note their comments in their recent results announcement.

One of the big concerns I had was that Reinet would become something of a "value trap" along the lines of Venfin where it took a long time for shareholders to get anything significant in the form of dividends or realised profits from investments.

Bear in mind that Reinet enjoys handy "cash-flow" from its investment in British American Tobacco so there should be no reason why shareholders shouldn't get a piece of this.

I thought it was quite encouraging then that Reinet mentioned that dividends were on the cards in the coming financial years.

Groundbreaking social investment fund launched

2009-05-20T19:29:00.000-07:00

Investors in market-based solutions to social problems can now receive a financial return on their investment, rather than merely a measure of social equity. Believed to be the first funds of their kind in the world, Heart Social Investments are launched today.

Heart Social Investment funds are built around a concept called Blended Value Proposition, offering investors both a financial and social return on investment. On the other hand, the Traditional Value Proposition that most investments are built around, yields economic returns and no social benefit, and traditional private or corporate giving (philanthropy) yields social value with no financial benefit. This means that going forward corporate, private and foundation giving (philanthropy) could earn a financial return, on top of the expected social impact.

The Blended Value Proposition funds achieve the financial (as well as social) return by investing in social enterprises. The core objective of a social enterprise is to promote social and/or environmental gain and it does this through a trade that generates income. As such, there is no difference between them and any other business, as long as social enterprises are sustainable and making money. And social enterprises are therefore not dependent on ongoing handouts, like most NGOs, to have a social / environmental impact.

Heart of Healing, from today re-branded simply as Heart, was established in Cape Town by Peter Shrimpton, an ex-stockbroker and a man who understands not only money markets and commerce but also the need to make social enterprises and NGOs sustainable. Peter has spent the last five years working with NGOs and creating and incubating social enterprises that needed a leg up in terms of the requisite commercial input and counsel.

The business of giving and, in particular, charity has evolved. Peter explains: "It is an outmoded concept to continue simply giving to an organisation - charities now need to be sustainable, they need to generate income through trade."

Social enterprises are fast being lauded internationally as the way to offer a sustainable solution to the world's increasing social and environmental challenges. There are currently no figures tracking the number of social enterprises in South Africa but elsewhere in the world, the market is mushrooming. In the UK there are around 55 000 social enterprises and in the US, where there are around 1.2 million non-profit corporations, the market generated $672 billion last year.

In South Africa, the CSI (corporate social investment) market is valued at around R4-billion and the private donor market is estimated at around R17-billion. As donor fatigue increasingly prevails, it is becoming critical to find ways for people to receive a return on their generosity and on their investment. Now that charities and NGOs - social enterprises - are beginning to earn money, the market can evolve ... into funds like the Heart funds - blended value proposition funds - and so that the market can attract more investment in the future.

"This formalises, in financial terms, what Heart has been doing for some time now", says Peter. "We're taking traditional financial investment models and applying them to the social enterprise space."

Heart has created a holding company for each of the funds. The aim of the funds is to give investors the potential of earning a 10% return. Each Fund is established as a PTY Ltd legal entity by Heart with an investment committee. The central objective of the Funds will be to invest in social enterprises that are helping to bring about positive social and environmental change.

Three Blended Value Proposition Funds are being launched, to incubate, develop and establish social enterprises (just like any other business) at critical stages of their development. For the Heart Seed Fund, a closed fund, the minimum investment for a maximum of 50 investors is R20 000 to raise R1-million. The objective is to incubate a developmental project from concept to market readiness.

Heart aims to raise R5-million for the Heart Venture Fund with two lots of R50 0000 each over two years for a maximum of 50 investors. The focus is to take the social enterprise to market, after completing the Heart Seed Fund incubation process.

And for the Heart Capital Fund, the aim is to raise R30-million over three years - again with R50 000 lots over three years for a maximum of 200 investors. The objective is to fully capacitate the social enterprise.

"In South Africa's financial market where trillions of rands are traded, R36-million is chickenfeed", says Peter, "but we want to prove that it works. We're not going into the financial market to challenge the industry. We're giving them an option they don't have at the moment ... we are challenging the donor market."

Peter adds: "We need to create a capital structure that can drive positive social change. Without it, we will not be able to begin addressing the huge and daunting number of social problems we face right now. Investment in social projects and social enterprises must now earn a return so that the business of giving can be more sustainable."

Heart Social Investments are different from other investment funds linked to a social / environmental cause, because they invest in social enterprises, not corporates being socially responsible.

Find out more information here - http://www.heartofhealing.co.za/index.php?option=com_content&task=view&id=566&Itemid=336

Private equity shows growth despite economic down turn

2009-05-19T13:07:00.000-07:00

SAVCA and KPMG today released the annual Industry Performance Survey reporting on the 2008 calendar year. The survey shows that South Africa’s private equity industry breached the R100 billion mark for the first time during 2008, despite the global economic meltdown and a slowdown in local merger and acquisition activity. In addition, R29.2 billion in commitments remain undrawn and can be used for further investment.

Growth in BEE private equity deals grew 38.1 per cent from R11.8 billion in 2007 to R16.3 billion in 2008.

These are some of the findings of a joint KPMG and SAVCA (South African Venture Capital and Private Equity Association) survey into the private equity sector released today.

Private equity has attracted foreign direct investment (FDI) into South Africa, amounting to R23bn over the last three years.

Taking into account the absence of the large public-to-private deals, as seen in 2007 (for example: Edcon, Alexander Forbes, Primedia and Consol), it was no surprise to see private equity investments falling in 2008 from R26.1bn in 2007 to R23.1bn in 2008. Fundraising also decreased from R15.4bn in 2007 to R7.2bn in 2008.

“These figures are a positive reflection on the achievements of the SA private equity industry,” says Warren Watkins, KPMG’s head of private equity markets for Africa. “Although SA is not immune to developments in the global economy, we currently appear to be better off than other private equity markets. This could be due to SA’s ongoing infrastructure spend and limited “credit crunch” exposure.”

The survey also found that funds valued at R68.6 billion were under the management of captives-government or entities that are either black owned, empowered or influenced. This is up 16.3 per cent from R59 billion in 2007.

The private equity sector maintained a lingering exuberance from 2007 through the first half of 2008 and then became more subdued in the second half. The net result was overall growth of 19.5% on R86.3 billion held at December 2007 to R103.1bn.

There is reason for cautious optimism for South Africa, says Watkins, in particular with respect to the prospect of lower interest rates arising during 2010, and the forthcoming FIFA 2010 Soccer World Cup.

“The scale of activity in our industry continues to outperform most of the major international economies, which bodes well for South Africa’s government stated growth targets, as local and international research confirms that private equity investment is a key driver of entrepreneurial activity and growth in any economy,” says SAVCA executive officer J P Fourie.

The survey has found that South Africa’s funds under management (excluding undrawn commitments) relative to GDP of 3.2% was higher than 2007 and again greater than the global average of 2.7%.

This is the tenth year in which KPMG and SAVCA have produced the private equity survey. Funds under management were R30.7 billion in 1999, with R103.1 billion reported in the current survey. This represents a 14.4% compound annual growth rate.

For the full survey, visit www.kpmg.com

Innovation Summit

2009-05-14T12:12:00.001-07:00

The ‘jury’ in the October 2008 ‘Innovation On Trial’ court case held at Emperor’s Palace in Johannesburg found INNOVATION NOT GUILTY on the charge of armed robbery and perjury. However, in mitigation of this verdict, the ‘jury’ (conference delegates made up of members from the triple helix), was unanimous in agreeing that successful innovation cannot happen without proper innovation management systems and processes. Opened by the Deputy Minister of Science and Technology, Derek Hanekom, the 2008 summit set the stage for annual national deliberations on innovation and its facets, in order for our country to become more competitive, boost economic growth and address social issues such as job creation and poverty.

Ruda Landman acts as MC and chairs discussions in this year’s event set to take place in an innovative simulated television recording studio. The 2009 event brings together some of our country’s foremost minds who will be delivering on how, if designed correctly and with a purpose, innovation can produce the required results companies need, based on their own culture and landscape.

This year’s event sees the inclusion of an exciting exhibition. Launched by the SA Innovator Magazine, this incredible expo called Innovation Investor Exhibition 2009, walks the innovation commercialisation process and brings together relevant stakeholders: inventors, investors, venture capitalists and financiers, Patent and IP attorneys, Designers, Government institutions and agencies.

CEOs, government and other leading figureheads will be treated to an array of workshops which will empower them to not only use innovation as a tool in planning for their organisation’s future but also to in a cup shell... design their own entire cuppa – tea… naturally... literally!

SA’s 2nd National Innovation Summit themed: Innovation by design…innovate for you future with a purpose, will be hosted at the Maropeng Conference Centre, nestled in the award-winning world heritage site, Cradle of Humankind on 18th and 19th August.

Contact information:
www.innovationsummit.co.za

IDC CONCLUDES EUR 60M LOAN WITH EUROPEAN INVESTMENT BANK

2009-05-13T03:51:00.000-07:00

The Industrial Development Corporation of South Africa Limited (IDC) has received a EUR 60 million credit line from the European Investment Bank (EIB) to finance private sector small and medium sized enterprises. The funds will support viable projects undertaken by small and medium enterprises businesses in the industrial, resources and services sectors.

The agreement was signed in March 2009.

EIB Vice President Plutarchos Sakellaris, who is responsible for lending operations in South Africa, said: “This loan is a strong signal of the EIB’s commitment to supporting the private sector and encouraging the creation of employment in South Africa. Moreover, the Bank is confident that by working in partnership with the Industrial Development Corporation we can help to stimulate the South African financial markets by diversifying IDC’s funding base and enhancing the provision of finance to SMEs.”

Commenting about the loan, Qhena said the line of credit will improve access to funding SMEs in the country.

“This credit could not have come at a more opportune time when the cost of raising funds is extremely high given the market volatility and the liquidity crisis,” Qhena said.
“We are particularly pleased that this loan will further enhance our commitment to development finance and addressing market failures.”

“IDC’s expertise in project evaluation ensures that the EIB funds are directed towards projects which promote economic growth and job creation, as well as being environmentally and socially sustainable.”

The IDC’s relationship with the EIB dates back to the mid ‘90s and over the years provided four credit lines totalling about EUR 165 million to IDC for private sector small businesses in South Africa.

Vox Telecom

2009-05-05T20:37:00.000-07:00

Do any of the private equity players know if there is any substance to the rumour that Lerekeo Metier intends to delist Vox Telecoms shortly?

I know that up until the middle of January 2009 they were quite active in buying Vox shares on the open market.

Anyone heard anything?

Private equity needs to adapt

2009-05-05T20:35:00.000-07:00

The global credit crisis has produced a mixed bag of fortunes for private equity - the investment class in which capital is invested in private companies. On the downside, corporate earnings have declined but on the up, reduced company valuations have produced a range of investment ‘bargains’. Profitable exit from deals is likely to be delayed due to the downturn, however, with a slowdown in the number of companies listing on stock exchanges, companies which may previously have gone public are now good prospects for private equity investors.

This was reported by the South African Venture Capital and Private Equity Association (SAVCA) and Sanlam Private Equity (SPE) at a jointly-hosted media briefing in Johannesburg today which examined the state of private equity locally and globally.

Private equity currently…

What is certain, said Cora Fernandez, deputy CEO of SPE and chairperson of SAVCA, is that experienced managers have demonstrated their ability to adapt in a changing and challenging market. “Globally, merger and acquisition activity has slowed and mega deals have evaporated. Investors remain cautious since earnings visibility is a major challenge and debt markets have improved marginally. There is no shortage of debt for good deals, but the amount of debt offered has come down along with gearing levels. We have, in essence, gone back to private equity basics.”

She said that private equity players in developed markets were now looking to mid-size companies for investment opportunities, with a hive of activity currently underway in underperforming assets and secondaries.

“The private equity industry in SA is far better placed than its more mature counterparts in the first world. South African private equity deals have never been geared to the same extent as the gearing levels seen in developed markets. As a result, we don’t expect to see a high level of underperforming or distressed assets, work outs or turnarounds,” said Fernandez.

She said that South Africa’s industry may be small by international standards - it makes up only one percent of global activity - but it does contribute a significant 2.8 percent to GDP which contributes to expansion and development in the country. “It is sophisticated and well-organised with a well established network of highly experienced players, deep and liquid debt markets and solid legal framework.

“Currently, the biggest challenge facing us in the aftermath of the financial crisis is fundraising. Locally, investors into PE funds are largely pension funds and endowments, many of which are currently reviewing their asset allocation strategies in search of greater liquidity. More than 50 percent of capital raised by PE funds in the past two years was sourced offshore, principally the US and European countries. The full extent and consequences of this risk is only likely to be felt in the next 12 to 18 months.”

Fernandez said that, despite these challenges, private equity remains a great source of foreign direct investment and of growth and expansion finance. “This is very good news for the financial services sector and the economy. It essentially means that we can use foreign capital to finance and stimulate growth in SA.”

Looking ahead…

Looking ahead over the next few years, J-P Fourie, executive officer of SAVCA said that more equity-only deals were a strong possibility in South Africa and around the world. “But raising funds in a climate of depressed corporate earnings will be a challenge. We will also see the lifecycle of a private equity deal increase as companies take longer to convert investment funds into tangible business results.”

He said that it looked likely that huge write-downs would be made, particularly in the highly leverage Europe and US, and that highly profitable exits would present a massive challenge. “Private trade sales will far outstrip listing exits or sales to other private equity funds and, unfortunately, some new, young private equity firms could fall victim to a low appetite for private equity fund raising.”

On the plus side, many international players are still extremely interesting in the value which emerging markets can offer. “Because, unlike the stagnant or declining growth in Europe, the US and Australia, there is still good growth in China, Brazil and India and, to a larger extent, the African continent.”

The SAVCA KPMG annual private equity and venture capital industry survey results will be published later in May. For more information visit www.savca.co.za or www.spe.sanlam.com.

fring gets 3rd round funding

2009-04-30T21:45:00.000-07:00

fring™ (www.fring.com), the leading mobile Internet community and communication service, today announced the successful completion of its third round of funding to accelerate fring’s growth, openness and business activities. All previous fring investors participated in this round including U.S. based North Bridge Venture Partners, Pitango Venture Capital, Veritas Venture Partners and VenFin Limited.

Avi Shechter, fring co-founder and CEO said: “With this new funding round we will accelerate the realization of our ongoing commitment to make fring even more accessible, relevant and easy to use, therefore reducing practical barriers for mainstream users as well as 3rd party developers and partners who have expressed continued interest in fring and the fring platform.” He continued, “Combining community, experience and communication fring is already turning the mobile into the ultimate social device by mashing up people’s favourite forms and modes of communication even beyond what the fixed PC environment can offer. With this new investment all our investors recognize our leadership in this emerging paradigm shift, and demonstrate their long-term commitment to our vision. We plan to add to the fring experience and make it an ever more central part of fringsters’ social lives”.

This additional funding will be used to continue making fring more easily accessible and relevant to users and partners. With more supported platforms, devices, add-on services contributed by developers worldwide, continuously improved usability and rich features, fring is turning the mainstream mobile device into the social nexus for users to share, interact and communicate with all their cross-community mobile and online friends. For example, fring users share experiences with friends on facebook, Twitter, Last.fm and more, while communicating via Skype®, MSN® Messenger, GoogleTalk TM, Yahoo!TM, AIM® and ICQ® among others, and further enhanced with functional and location based services like WeFi, all through a single social experience from their simple fring interface on their mobile device.

Shechter concluded, “Our millions of users actively sharing, interacting and communicating over fring today will benefit greatly as fring becomes even more accessible to the rest of the mobile world, ready to shift their online social nexus to their mobile phones.”

Coast2Coast makes tasty acquistion

2009-04-23T20:44:00.000-07:00

Cris Dillon, COO of C2C said, “Well-run companies with top class operations and a great product will always perform well, even in a difficult financial climate. As a low cost, popular fast food, pies are a wonderfully resilient product. St Pie is growing strongly, with over 20 percent growth in sales per annum, year-on-year for the last five years. This transaction is in line with our strategy of investing in fast moving consumer goods (FMCG) companies in South Africa.”

Gary Shayne, CEO of C2C said, “The St Pie corporate culture and values are in line with those of Coast2Coast and we feel that this is a mutually beneficial transaction that has great potential.”

St Pie started fifteen years ago from a small café and today manufactures in a ‘state of the art’ foods plant in Lydenburg. It distributes 19 frozen pie variants to their growing database of over 1500 retailers who bake the pies and sell them to the public.

Wyk Geyser, managing director of St Pie is equally positive. “After successful negotiations and getting to know the C2C team, we’re ecstatic that we have found a partner who shares our values and can offer us the stability we’d like.

“The transition into the C2C group has gone extremely smoothly and we’re excited at the prospects of this new partnership. We can now continue to expand strongly and we feel extremely fortunate that despite the difficult times the economy is experiencing, we’re still able to enjoy the fruits of a flourishing business,” says Geyser.

The decision to invest in St Pie was based on the outcome of a thorough due diligence process and strong profitability and growth characteristics of the company. Coast2Coast generally invests in mature entrepreneurial businesses that have a minimum annual profit of R5-million, an annual turnover of at least R50-million, and St Pie comfortably fulfilled this criteria.

St Pie’s financial performance has not been adversely affected by the current gloomy economic climate and continues to expand strongly. “There is a good structure in place, sound business principles and a proven formula to ensure St Pie’s products pies are always of superior quality. In any financial environment, people have to eat and everyone enjoys good value.” Dillon concludes.

For more information on Coast2Coast visit www.coast2coast.co.za or www.stpie.co.za

SA investor seeking

2009-04-18T22:35:00.001-07:00

South African investor is seeking to invest in entry-level short-term insurance brokerage firm or multi-purpose broking operation in Gauteng.

Must be fully licensed, have existing staff infrastructure and preferably have existing revenue base as well as represent a known franchise brand.

For further information please e-mail sales@rival.co.za with your information.

Venture Capital Investments Plunge 61% Amid Frozen IPO Market

2009-04-18T22:34:00.001-07:00

U.S. venture capital investments fell 61 percent to $3 billion in the first quarter, the lowest level in 12 years, as the financial crisis chased away funding for technology and clean-energy deals.

Read the complete article here.

LEHMAN BROTHERS’ MERCHANT BANKING BUSINESS JOINTLY ACQUIRED BY REINET AND CURRENT

2009-04-16T12:01:00.000-07:00

Reinet Investments S.C.A., through its wholly-owned subsidiary Reinet Fund S.C.A. F.I.S., and the current management team of Lehman Brothers Holdings Inc.’s Merchant Banking business have completed the acquisition of the assets of Lehman Brothers’ Merchant Banking business. Reinet and the management team have created a new entity, which has been named Trilantic Capital Partners (‘Trilantic’). Trilantic will manage approximately $3.3 billion in portfolio assets
through the two former Lehman Brothers funds – Fund III and Fund IV (‘the Funds’).

Through the transaction, which has been approved by the Funds’ limited partners, Reinet has purchased a 49% stake in Trilantic for $10 million and will take over Lehman Brothers' $230 million of un-invested limited partner commitments to Fund IV. The management team will own the remaining 51% of the partnership.

Charles Ayres, former managing director and head of global merchant banking for Lehman Brothers, will manage the new entity along with his four other partners: E. Daniel James, Joseph Cohen, Vittorio Pignatti-Morano and Javier Banon.

Johann Rupert, Executive Chairman of Reinet, said:
“Alan Quasha, principal of Quadrant Management and Vanterra Capital, played the key role in leading the transaction. Without his experience and diligence the deal would not have closed. Alan will serve on Trilantic's Investment Committee. The former Lehman Brothers franchise and closely knit team provide a strong platform with significant uncommitted capital at a time of great investment opportunities in the private equity middle market.”

Google launches venture cap offering...

2009-03-31T12:14:00.000-07:00

Google Ventures seeks to discover and grow great companies - we believe in the power of entrepreneurs to do amazing things. We're studying a broad range of industries, including consumer Internet, software, hardware, clean-tech, bio-tech and health care. We invest anywhere from seed to mezzanine stage and embrace the challenge of helping young companies grow from the garage to global relevance.

More info here.

Rival Industrial buys Bundublog

2009-03-28T02:01:00.000-07:00

Niche market industrial publishing company Rival Industrial has purchased local blogging platform Bundublog effective 1 April 2009.

Bundublog is a South African focused free blogging community with around 130 active blogs with bloggers from South Africa, Zimbabwe, Kenya and Nigeria. Currently the site enjoys about 8000 unique visitors each month.

Rival Industrial owns stakes in niche market industrial titles including ManufacturingHub.co.za and Ferronews.com as well as remedial and special education website RemSpecED.

Marc Ashton speaking on behalf of Rival Industrial said: "The transaction serves two purposes for us - firstly it allows us to aggregate some of our niche content to a wider audience which helps us generate advertising revenue and secondly it ties in with our longer term strategy of developing an audience for syndicated internet radio content."

According to Ashton, more and more South Africans are taking to blogging.

He said: "Every day new blogs are being added to the aggregators, small businesses who can't afford a web presence are suddenly being given a free tool through which to market themselves and ordinary citizens on the ground in places like South Africa, Zimbabwe and Nigeria are able to connect with the world and give us real-time feedback of events on the ground - it's seriously powerful if we can find ways to harness it correctly."

While the site will continue to focus on Africa, some changes are also planned to build the Bundublog experience including:

- Development of podcasts from bloggers
- Music platform for upstart South African bands to promote their talent
- A science and technology platform, in conjunction with ManufacturingHub.co.za aimed at skills development in this sector

Ashton concludes: "We're excited about the opportunity we've been presented by taking over Bundublog and we look forward to welcoming a whole host of new bloggers to the platform."

About the company
Rival Industrial is a Gauteng based corporate wellness, industrial research and publishing investment company.

The company holds stakes in ManufacturingHub.co.za - an online publication aimed at the South African food, pharmaceutical, chemical and cosmetic manufacturing industries - as well as Ferronews.com which provides information on the ferrous metal industries in Africa.

Other investments include RemSpecED, a remedial and special education portal aimed at parents, teachers and therapists.

For further information
Tel: 082-561-1585
E-mail: webmaster@rival.co.za
www.rival.co.za
http://bundublog.com/

AI and Venture Cap

2009-03-07T22:33:00.001-08:00

Is quality "Artificial Intelligence" the way that search engines - Google / Yahoo / a new player - are likely to monetise their offerings in coming years?

The Internet is likely to be home to a number of Artificial Intelligence based technologies in coming years - simply because it is so big and unwieldly at the moment.

You think about how much information there is out there, so many sources and opinions and different levels of credibility for the information you read. How do you rank it?

How do you say that the information coming from Source A is more valuable than the information coming from Source B?

Even in professional social networks, forums and message boards - how do you rank the contributions made by the various posters?

Google is on a mission to put every book ever published on the internet, add in blogs, dissertations, conference papers etc - and there is so much GOOD information on the web that a user has little chance of identifying the salient points of any debate and trying to work out what information they need to know without extensive digging.

As more and more niche market social networking offerings come online - I suspect users will be able to not only pick the brains of human industry experts - but also leverage off Artificial Intelligence to find the info they are looking for.

The idea is way to big for a simple person like me to get my head around, but I'm wondering if this isn't the "next generation" of earnings for a company like Google. Where we presently have a simple "SEARCH" function / toolbar which we can add to our sites to help us monetise our offerings, I'm wondering if Google won't look at:

1. Ask an expert a question or
2. "Super AI Search" functionality

Basically a user would be able to use the toolboxes but for a far larger fee be able to draw up high quality information off the web hitting up an army of Artificial Intelligence applications to find the information you require.

The functionality could be the same in terms of posting widgets into boxes but instead of using Google Ads or the Search boxes, these would be replaced by these smarter widgets? It would be a good way to leverage off these massive blogging platforms and networks that are growing rapidly and looking for ways to monetise their offerings.

Anybody got ideas on how much progess has been made in terms of AI in the search-engine space? Are there moves afoot to be able to develop these offerings?

Any South African companies making moves in this part of the AI industry space?

Source: www.aiblog.iblog.co.za

Absa Capital Private Equity and Vantage Capital acquire Kwikspace

2009-02-24T07:28:00.000-08:00

Absa Capital further underscored its private equity credentials today when a consortium of private equity investors, co-led by Absa Capital Private Equity (Pty) Ltd (Absa Capital Private Equity) and Vantage Capital Group (Pty) Ltd (Vantage Capital), announced that they had acquired the entire issued ordinary share capital of the JSE-listed Kwikspace Modular Buildings Ltd (Kwikspace).

The consortium comprises Absa Capital Private Equity, Vantage Capital and certain members of the Kwikspace management team.

The offer - R8 a share for a total consideration of R683 m – was made to acquire the entire issued ordinary share capital of Kwikspace, excluding those shares held by Vantage Capital and certain other shares held by the current management team.

Andre Pieterse, CEO of Absa Capital Private Equity, said that he was delighted to acquire Africa’s largest and most diverse manufacturer of factory-built modular homes, clinics, offices and classrooms.

“The offer was implemented by way of a scheme of arrangement between Kwikspace and its shareholders, other than Vantage and Kwikspace management, in terms of section 311 of the Companies Act,” said Pieterse.

Mutle Mogase, Vantage Capital’s director on the board of Kwikspace commented: “We have a long-standing relationship with the company which dates back to 2006 when we first acquired a 30% shareholding as BEE investor. This buyout represents a new and exciting phase in this relationship.”

All conditions precedent to the scheme were fulfilled and the scheme consideration was paid to shareholders on Monday, 23 February 2009.

The listing of Kwikspace shares was terminated at the commencement of today’s trading.

Kwikspace has been building a wide variety of modular building units for more than 30 years and exporting to many parts of Africa, South America and the Middle East - supplying customers in the private, industrial, commercial and government sectors.

Kwikspace has factories in Johannesburg, Durban and Cape Town, with sales offices situated in most major cities throughout the country.

Reinet invests in SynthaSite

2009-02-18T03:27:00.000-08:00

SynthaSite, the leading online Web site builder, today announced it has secured $20 million in Series B financing from Luxembourg-based Reinet Fund S.C.A. The company plans to use the capital to accelerate the development of its Web site creation tools and its peer-to-peer e-commerce platform through organic growth and strategic acquisitions in both its San Francisco and Cape Town, South Africa locations.

In a tough economic environment, SynthaSite raised $20 million in the company's second round of financing. By making it easy for anyone to build and host a Web site, the company has grown its customer base to over one million registered users since raising its $5 million Series A round in November 2007. SynthaSite prioritizes its development based on user feedback and has recently introduced a number of new features including an enhanced user interface, 60,000+ widgets, domain registration, shopping cart features and a blogging platform.

"We believe in providing the best possible experience for everyday people building Web sites. On top of that foundation, we have built a very scalable business model focused on generating revenue via value added services and partner relationships. Reinet shares our vision and we appreciate their strong support," said Vinny Lingham, CEO of SynthaSite.

"What sets SynthaSite apart is its vision and management team," said Frank Vivier, Chief Investment Officer of Reinet Investment Advisors. "The team's unique combination of technology, business expertise and proven track record make me confident that this company will be a big success story. Great companies are built during turbulent times."

"SynthaSite is maturing according to plan," said Johann Rupert, Executive Chairman of Reinet Investments S.C.A. "This next phase of execution will be both challenging and interesting and Reinet and SynthaSite together form a strong partnership to meet those challenges."

Web entrepreneurs

2009-02-17T11:58:00.001-08:00

Hello entrepreneurs... I've had a request from one of our readers to sound out SA web players.

They are looking to take full or partial stakes in some decent entry level SA web properties.

They would prefer pre or post revenue properties - i.e. sites or communities that are generating some revenue or are generating a decent level of quality traffic would definately be of consideration.

Sectors of interest include:

Science
Technology
Finance
Manufacturing
Mining
Industrial
Business

If you believe you have a web project that needs infrastructure, resources, investment or are looking to exit their investment please mail a motivation to marc@rival.co.za with some details of the project.

Observation

2009-02-07T22:03:00.000-08:00

A small observation on the blog post below.

We had quite a few responses for people looking for amounts of between R250k and R1.5m and quite a lot looking for small web based ventures or to kick-start IT businesses.

Had one very good suggestion in the "energy" sector which we're now planning to take a closer look at, but other than that no real BIG projects or suggestions....

I guess it found it very odd, that there are many smaller more "functional" entrepreneurs and fewer looking for some really big and bold projects... Wonder why that is??

Anyone want R50m in venture capital?

2009-01-31T13:13:00.000-08:00

Anyone want R50m in venture capital?

Yeah I thought that might get your attention. Had a pretty interesting week with two Venture Capital firms coming up to me - out of the blue - and asking if had any ideas where they can invest funds.

I get to chat to quite a few Venture Capital and Private Equity guys in my spare time and there seems to be a growing theme - "We've got a lot of money sitting on the sidelines and we just can't find anywhere to invest it in SA."

Both firms had problems trying to find places to invest their money - if they go with mass market advertising they get swamped by applications that simply takes too long to work through so they're trying to find smarter ways to find deals.

So I guess I'm throwing it out to the SA entrepreneurs blogosphere - any decent ideas out there for some sizeable investments where guys are open to venture capital or private equity deals?

If you've got some ideas feel free to drop me a 2 page motivation on marc@rival.co.za and we can take it from there....

Venture Capital Fell 33% Last Quarter to Lowest Level Since ’05

2009-01-23T21:44:00.001-08:00

Venture-capital investment dropped 33 percent in the fourth quarter of 2008, hammered by a recession that drove software deals to their lowest levels in a decade and cut access to capital for alternative energy firms.

Total investment in startup companies fell to $5.4 billion, the lowest total since early 2005, the National Venture Capital Association and PricewaterhouseCoopers LLP said in a study released today. Investments for the full year fell 8 percent, the first drop since 2003.

Read the full article on Bloomberg here....

Reinet confirms Lehman deal

2009-01-21T12:00:00.001-08:00

Reinet has confirmed its offer to purchase the assets of Lehman Brothers. Its an intriguing deal from a South African perspective in that a major SA investment player has displayed enough confidence to go ahead with an international deal...

The press release reads:

Reinet Investments S.C.A. announces that its wholly-owned subsidiary Reinet Fund S.C.A. F.I.S. (together "Reinet") and the management team of Lehman Brothers Merchant Banking ('LBMB') have entered into an agreement with the Lehman Brothers bankruptcy estate for the purchase of certain parts of the business of LBMB with respect to the management of two private equity funds currently known as Lehman Brothers Merchant Banking Partners IV LP and Lehman Brothers Merchant Banking Partners IV (Europe) LP (together the 'Funds').

The transaction is subject to various regulatory approvals, as well as the approval of the limited partners of each of the Funds.

As part of the proposed transaction, Reinet will commit up to $230 million to both existing and new investments in the Funds over the remaining three and a half year investment period. Reinet will also participate in the consideration of all future investments by the Funds. As indicated on 12 January 2009, the transaction is expected to have no material impact on the net asset value of Reinet.

About Lehman Brothers Merchant Banking
LBMB manages funds that seek significant long-term capital appreciation through direct investments in established operating companies in partnership with management. The funds invest in companies with sound business fundamentals, proven operating teams and a compelling business strategy. Since 1986, LBMB has raised and managed four institutional funds and several
employee investment vehicles, with total committed capital in excess of $8.0 billion.

To date, the Funds have made investments of some $ 800 million in aggregate. Further commitments by limited partners to invest in the funds currently amount to some $1.7 billion.

Questioning SA Fastest Growing companies in 2009 list

2009-01-16T20:33:00.000-08:00

I got an e-mail supposedly from Reuters detailing South Africa's Fastest Growing in January 2009.

I've got to be honest and say I have to question the list because there were some unusual names on the list.

1) Pick and Pay
2) Africa cash and carry
3) Newclicks
4) Willoton Oils
5) Toys R us
6) British Airways
7) Edcon
8) Mediapost
9) Footprints Filmworks
10) Wellington Fruits
11) Jeftrost Enterprizes
12) Pure Islam Media
13) Kagiso Media
14) Bakerstransport
15) Pam Golding Properties
16) Malls Tiles
17) Exotic Cars
18) Bakers Biscuits
19) South African Law Society
20) Roger Matthews Investments

An airline like BA being one the fastest growing companies in SA?
Exotic Cars?! - In a time like this when the car market is sinking?
Pam Golding Properties? - when the property market is in serious distress

Anyone got any insight into how this list was put together? What criteria were used?

Do you agree with the names on the list?

Venture Capital still on tap

2009-01-15T20:08:00.000-08:00

While entrepreneurs are struggling to get loans from banks, venture capital (VC) players are still assessing opportunities.

Read the complete article here on Fin24.com

Personalised Medicine: An Opportunity for Investment

2009-01-14T11:14:00.000-08:00

The pharmaceutical industry is currently facing some key challenges. The increase in drug development costs, a decrease in the number of drugs being approved, and scrutiny from regulatory authorities are forcing companies to look at alternative revenue generators. Patients themselves are also demanding more effective and safer drugs.

Read the complete article here.

SA Venture Capital musings for 2009

2009-01-11T17:44:00.001-08:00

So what's going to be hot in the Venture Capital and Private Equity sector in 2009? Who knows!

2008 really spooked capital markets and a lot of players are quite content to sit on the sidelines and stick their cash into moneymarket accounts while the world continues to tumble around them.

In my humble opinion I think the food and agriculture sector - as boring as it appears - will gather the most interest from venture capital players.

Invariably the private equity guys are already circling around some of the quality JSE companies and looking to delist them. As an investor not involved in the private equity side of things this would frustrate me to no end to see a number of quality companies delisted.

The most interesting current "News" in the private equity (PE) / VC space has to be the speculation that Johann Ruperts Reinet Investments is about to take a stake in some of the merchant banking / PE assets of Lehman Brothers. The market enjoyed seeing Reinet spending its money but more than a few people will be scratching their heads at the decision to blow money on the financial sector at the moment.

I've put a couple of suggestions below of sectors that I see could receive a boost in 2009, but I'd be interested to see hear what our readers make of the current climate:

Waste Management - still a potentially high growth sector in SA
Food - The government will more than likely carry a lot of responsibilty for feeding its population and demand remains high across the world.
Biotech in the food sector: Same as above
Education and E-learning: Already I've noticed a couple of E-learning projects in SA receiving nice funding

Any other thoughts / comments and suggestions?

*** Note author holds shares in Reinet

Agri-sector

2008-11-23T20:18:00.000-08:00

Not a particularly specific blog posting but something I thought I would throw out into the ether.

I had an interesting interview with Jon Maguire the Chief Investment Officer of a UK fund management company called Cru. Scanning some of the news sites, I see that Maguire and Cru have raised a few hackles in SA and the UK.

Whether people like them or their investment methodology is not of any particular consequence to me. However I did want to touch on one of the comments he made.

One of the sectors they believe provide some great opportunities are the African agricultural sectors. "Farming" will never hold the appeal of high finance or technology, but the reality is there will always be mouths to feed, there is a global shortage of food (i.e. plenty of demand for the product) and with banking on the back foot agriculture is one of the areas where they are seeing some opportunities.

They've invested in places like Malawi, where farming is a relatively low cost investment.

With the global economy facing a massive downturn, food remains a highly defensive industry in which to be in - as they say when things go pear shaped there are always two sectors you can rely on - Food and Beer!

Would be interesting to hear from other entrepreneurs and investors about issues for or against the South African / African agriculture sector as a viable industry to consider.

Buildmax

2008-11-23T01:08:00.000-08:00

This isn't really a "Venture Capital" type post, but more in the line of private equity transactions that ordinary SA investors may be interested.

Two of the top SA private equity players - Brait and Peregrine have stakes in JSE listed Buildmax.

The profile of Buildmax according to Sharenet is:

Buildmax has recently been repositioned as one of Africa?s leading empowered opencast mining contractors and the largest in South Africa in the niche of coal mining. The company further provides bulk earthworks and construction materials to the mining and construction industries. Specifically the Equipment - Services business unit is involved in opencast mining projects from greenfields stripping to mine closure and rehabilitation and offers bulk earthworks for civil engineering projects. The Construction Materials business unit houses sand quarry operations, aggregate distributors and cement brick and block manufacturers.

The Brait guys have been extremely bullish on the prospects for Buildmax based on their coal exposure and have recently taken a nice stake in the business. The theory is to follow the "Energy" type businesses as they try to meet SA's constantly growing need.

Buildmax is listed on the JSE and currently trades at around 95c a share. The company trades on an historical price to earnings (PE) ration of 4 times earnings.

If it is good enough for the top private equity guys it might be good enough for the ordinary investment plebs like me!

Can you help?

2008-11-12T11:18:00.000-08:00

I know that in South Africa, we tend to become somewhat immune to stories of violence committed against young kids.

However I'm making a call to mobilise any resources I can to assist. I received a message from a guy who runs a children's home in JHB. Over the last four years he has seen plenty of bad things and has regularly had to hit people up for cash.

I received the following SMS from him this evening and when he says things are bad - he means things are bad.

"Dear friends, we have a little girl named Kim (aged 6) who was badly raped - the worst we have ever seen. The cost of the reconstructive surgery is R100 000. My company is able to contribute R50000 and we are seeking sponsors for the difference"

I completely appreciate that things are tight at the moment but I have committed to assisting in the fundraising efforts.

If you are able to assist in any way please drop me a mail at marc@rival.co.za or contact me on 082-561-1585 to discuss further.

Kind regards,
Marc Ashton
www.ManufacturingHub.co.za

Innovation Fund Invites South Africans to Submit Proposals for Investment in their novel inventions

2008-11-05T03:19:00.000-08:00

The Innovation Fund is inviting investment proposals from all South Africans with novel and inventive technological ideas that are commercially viable.
The Innovation Fund, which is an initiative of the Department of Science and Technology mandated to promote technological innovation through investment in development and commercialisation of novel and inventive South African technologies, is inviting investment proposals from all South Africans with novel and inventive technological ideas that are commercially viable.

In announcing this invite the Innovation Fund’s Senior Commercialisation Manager Duncan Raftesath said, “this invite is based on the Innovation Fund’s firm belief in the inventiveness of South Africans, their ability to invent technologies and apply them in solving real life problems. Through this invite we are calling on South African scientists, engineers and inventors to come up with truly novel and inventive technologies that have a commercial case and we will help them finalise their R&D, protect their intellectual property and commercialise their inventions.”

Investments will be made available through the Innovation Fund’s investment programmes which are the Technology Advancement Programme (TAP), Seed Fund and the Patent Support Funds. Projects that need investments to finalise their Research and Development will receive investment through the Technology Advancement Programme which invests in late stage (i.e. where proof of science already exists) research and development of novel and inventive technologies. TAP investments are up to R15 million per project over five (5) years. Projects that have already developed novel and inventive technologies but need investment to take their technologies to the market will receive investment through the Seed Fund, which invests in early commercialisation/ start up activities aimed at taking technological innovations to the market. Total value of Seed Fund investments will be on case by case bases. The last programme that seeks investment proposals is the Patent Support Fund which is comprised of instruments targeted at SMMEs and Techno-entrepreneurs. The Patent Support Fund’s instruments are meant to assist with the costs associated with the protection of intellectual property through the patenting system. Each successful SMME will receive an investment of up to R750 000.

All interested individuals, SMMEs and research institutions must submit their proposals by the end of this financial year, 31 March 2009. Another open call will commence from 1 April 2009. Further information and application forms are available on the Innovation Fund’s website www.innovationfund.ac.za.

Hidden opportunities

2008-10-28T22:07:00.000-07:00

A mate of mine told me an interesting story last week which I wanted to share with our readers.

He has been consulting to a biggish firm for about 6 months now and so he has gotten quite a good idea of how the politics and the people in the office environment work. Most of them don't know his role in the business and assume he's largely an administrative type which suits his role just fine.

The 'economic crisis' (as it has been dubbed by the media) has meant that the business involved has had to speed up some of its business process review.

This culminated last week in a meeting with all the staff of the affected departments from across the country at head office.

As you can imagine, there was plenty of chatter about job security, retrenchments etc.

For my mate, one of the interesting things was that he was able to sit in on the meeting and watch the reactions as management discussed some of the changes that would be happening, particularly around HOW people would be working. He said that even though there was never any mention of job cuts or retrenchments, many of the employees in the group were concerned that the new job descriptions and KPA's would be beyond them and they just wanted to go back to the old way of working.

Interestingly he said thjat it wasn't age that decided whether somebody was enthusiastic about adopting change. The oldest guy on the team (and presumably the person most reluctant to adapt to a technology based change), was the most enthusiastic supporter of the idea.

My mate was intrigued and he asked the guy (Call him Mr X) why he had been enthusiastic about seeing the bigger picture and going with the changes.

Mr X said "The majority of these people working here depend on their salary as their only means of income, if you take the comfort factor away, there is

no room for them to see the opportunities that this presents. Not one of them picked up that the company is paying for them to receive international training that almost no other South African has received - instead they are worried about a pay cheque."

He went on to say "for me I've been in this industry for 37 years and have slowly but steadily built up some sideline sources of income so I am not wholly dependant on my salary to pay the bills."

The above proves that for many people, money does make the world go round. That single pay cheque that most people rely on is there sole motivation - if they stopped focusing on that for a moment and saw the opportunity to receive R20 000 worth of training that they would probably not have received otherwise.

Interesting way to look at things....

2008-10-28T21:19:00.000-07:00

All the blood, sweat and tears that went into the making and developing of 12 ICT businesses in the Western Cape paid off when the Cape IT Initiative (CITI) graduated the companies from their business development programme, VeloCITI on Thursday, 23 October.

The VeloCITI programme which aims to help ICT entrepreneurs re-assessing their business model in order to position them for growth, was one of three CITI projects that was highlighted during the ceremony that took place at Kelvin Grove Club in Newlands. The VIP Graduate programme and the My Business Group programme participants and winners were also honoured.

According to Viola Manuel, CITI’s executive director, the VeloCITI programme and its participants have shown significant growth since the launch in 2006. This year’s cumulative monthly turnover grew to R1.62 million from R275,000 over a period of seven months and the cumulative owner’s salaries grew to R172,000 from R21,000. “This continued curve in growth shows a definite need and hunger for sustainable support and mentoring in the market. With the available infrastructure support from the Bandwidth Barn, we are able to address the looming ICT skills shortage combined with the necessary business skills that is required to run a thriving business”, Manuel said.

The two finalists in the VeloCITI programme, Breadbin Interactive and Nclose, both secured large deals with major corporate clients, but it was Nclose who walked away with the winning title and prize. “The value and input we have received from Cape Venture Partners, PeerPower and CITI has been tremendous. We have seen a marked improvement in the effectiveness of our daily tasks, the way we handle ourselves and our outlook on the future. The lessons we have learnt have assisted in creating strong foundations as well as giving us the tools necessary to sustain the growth we are currently experiencing”, said Stephen Osler form Nclose.

The VIP Graduate programme focuses on closing the existing gap between final year ICT students and entering the workspace as a marketable individual. A maximum number of 12 candidates participated in this year’s programme that consisted of ten modules. The two IT graduate winners were Wayne Neethling and Ncumisa Ndungane. “Still being in college, I know nothing really about the working environment. This programme trained me in basic corporate necessities – like where to start, how to act in a working environment and how to behave in an interview. Winning this programme means that I am on the right track and that motivates me to keep on going”, Ndungane said.

A further 12 companies participated and completed the the My Business Group programme. This six month programme creates an add-on opportunity for VeloCITI graduates or anyone who is already in the IT business sector to come together and to grow their strategic thinking process, supply ideas to their businesses and to share experience and information in a group. This creates a sense of belonging amongst entrepreneurs and makes them feel less isolated.

“We are really pleased with the growth and competence of this year’s graduates. With the continued private sector and provincial government support, CITI and the Bandwidth Barn will definitely continue to invest in the development of the local ICT sector as the demand for specialised and skilled individuals are expected to increase even further over the next few years”, Manuel said.

About the Cape IT Initiative:
The Cape IT Initiative (CITI) is a networking and cluster development agency that brings together people, ideas and capital to grow the Western Cape, South Africa’s ICT sector. CITI’s goal is to promote Cape Town as a global IT hub and gateway into Africa, thus facilitating the creation of jobs and prosperity through IT. In union with its subsidiary, The Bandwidth Barn, an IT incubator and business accelerator in the Western Cape, opportunities are created for great successes.

Contact details:
Tamzin Martin
Project Manager
Tel: 021 409 7000

Coast2Coast

2008-10-15T12:25:00.000-07:00

I had a meeting with the guys from Coast2Coast this evening. They are an up and coming private equity firm which is actively seeking investments in South African Fast Moving Consumable Goods (FMCG) sector.

The company is looking for established businesses - preferably with a 10 to 15 year operating history and strong brands to take majority equity stakes in the business.

For further information please contact Cris Dillon or Gary Shayne on 021 701 2232 or visit www.coast2coast.co.za

R1 BILLION FUND LAUNCHED TO INVEST IN ‘CLEANTECH’ COMPANIES AND PROJECTS IN SOUTHERN AFRICA

2008-09-30T22:35:00.000-07:00

Inspired Evolution Investment Management is delighted to announce the launch of South Africa’s first ever clean technology (‘cleantech’) investment fund: The Evolution One Fund is a 10 year private equity fund targeted to grow to ZAR 1 billion by mid-July 2009. The fund has conducted its first close in July 2008 at ZAR 400 million raised from four core international investors: IFC (a member of the World Bank Group), Castleway Properties (advised by Consensus Business Group), the Swiss Investment fund for Emerging Markets (Sifem) and the Finnish Fund for Industrial Cooperation (Finnfund). The fund is currently being marketed to investors in southern and South Africa and plans to make its first investments in 2008.

Cleantech spans many industries: clean energy generation; water purification; waste management; and efficient production technology. Evolution One’s investment philosophy is based on the concept of additionality whereby accelerated development and use of cleantech products, services and processes not only provide superior performance at lower costs but also reduce environmental and climate change impacts, thereby promoting mutually reinforcing benefits for society.

Global investment activity in the sector is already significant, estimated to be US$ 148.4 billion in 2007 (source: New Energy Finance) and is forecast to exceed US$ 226 billion by 2016 from private equity and venture capital alone. High growth opportunities are emerging in the agribusiness, cleaner production, pollution control, waste management and transportation sectors, as well as the core areas of energy and water. However, to date, no fund has focused on the role of cleantech in Africa where environmental and social issues make it a vitally important driver of the economic development of the region.

The Evolution One Fund will make around 10 to 15 investments over a period of three to five years across the whole SADC region. The fund will focus on cleaner energy and the environment – aiming to generate an enhanced annual internal rate of return by focusing on the following eight sectors and sub-sectors:

Cleaner energy generation and energy efficiency
Cleaner production technologies and processes
Air quality and emissions control
Water quality and management
Waste management
Agribusiness and forestry
Natural products, organics and natural health
Sustainable buildings and environmental real estate

In all cases, particular attention will be paid to small, medium and micro-enterprises; broad-based black economic empowerment; and transformation benefits of underlying investment projects.

Dr Zuko Kubukeli, Executive Director of Inspired Evolution Investment Management said, “Cleantech provides cross-sector opportunities to make more sustainable investments without foregoing the traditional returns of private equity. Having raised ZAR 400 million from our core international investors, we are now targeting a second round of international and local investors. We are single-mindedly focusing on building strategic partnerships and on sourcing proprietary and appropriate technologies for application within the SADC region across a variety of investment projects.”

Mr Vincent Tchenguiz, Chairman of Consensus Business Group who are the advisor to one of the cornerstone investors and a founding partner in Inspired Evolution Investment Management said: “Consensus Business Group has had a strategic focus on the global environmental sector for a number of years. We have developed innovative business models to deliver strong financial returns and to add strategic value to our investee companies. We look forward to working with Evolution One Fund – we are confident that our long-term, wide ranging experience in the sector will serve to benefit the Fund.”

Ms Haydee Celaya, IFC Director for Private Equity and Investment Funds, said, “IFC’s investment in Evolution One Fund is in line with the World Bank’s overall strategy to support projects investing in technologies to combat climate change. This investment demonstrates IFC’s commitment to be a pioneer and a leader in the clean energy and climate change sectors in southern Africa.”

Further information is available on www.inspiredevolution.co.za.

Chemistry and innovation

2008-09-17T03:55:00.001-07:00

For those with a little interest in commercial science / biotechnology investments, you might be interesting in this workshop here.

Food and Pharma sector investments

2008-09-15T15:10:00.000-07:00

For investors looking at the South African Food or Pharmaceutical industries as places to make investments they may be interested in the following:

SA listed pharmaceuticals assessed

SA listed Food & Chemical companies assessed

Plug your Venture Capital requirements

2008-09-14T13:24:00.001-07:00

The thinking behind the SA VC Strategist blog is to try and establish something of a South African Venture Capital community for venture capitalists / investors to meet with potential business plans.

Personally I think it is one of the reasons that the internet is such a powerful tool. People looking for funds can throw a business idea out there and venture capitalists or investors can assess the options available to them.

With a bit of luck some deal flow can be generated if a decent venture capital community can be established. My personal opinion is that start-up / venture capital goes WAY beyond just askng for a hand out. I think the management skills needed to get the business off the ground are even more important than the money, which is why I think we'd like to focus on with this blog.

But for the mean time - COMMUNITY BUILDING IS THE NAME OF THE GAME...

So for that reason, I'm inviting South Africans who believe they have a good business idea but need some Venture / Start up capital to have a plug for business in the comment section of this blog and maybe tell our readers a bit about your idea, the kind of capital you are trying to look at and what skills you have / need and what kind of money you are looking for.

We don't want your whole business plan!

I read somewhere that if you can't sell your business in 200 words or less then your business plan isn't all that important. Maybe that should be the challenge!

Post your business ideas below and lets see what we can build up as we go along...

Tech startups / VC - commercial viability

2008-09-14T04:10:00.000-07:00

Article supplied by ManufacturingHub.co.za.

Every now and then, one of the technology bloggers or publications will run

with something along the lines of:

"South Africa's most promising technology start-ups"
"South Africa's best Web 2.0 offerings"
"South Africa's best web start-ups"

and then they will go on to mention the usual suspects such as Afrigator,

Amatomu, Muti, Zoopy, Blueworld, iBlog, Mxit etc etc.

But what I worry about is what makes these tech start-ups the "most promising" or the "best" from a commercial perspective.

NOTE I SAID COMMERCIAL PERSPECTIVE.

Many of these are really great web tools and I use all of them regularly, but for something to be "most promising" or "the best", you need to have a commercial aspect to it as well don't you agree?

I can come up with many brilliant concepts but if I can't make a return off it, then is it all that promising?

I've spoken to a couple of different people involved in these and other start-ups and I've been to a couple of venture capital / MBA / 'ideas' forums almost all of them agree that while the concepts are useful - the owners have no idea how to monetise what they've got.

Amazon.com
I have been wracking my brains trying to remember where I read an article about online reseller Amazon.com.

The author's concluded that Amazon was USEFUL to him as a consumer because he got goods nice and cheap but as an INVESTMENT, he would never touch the company, because it would battle to be profitable.

My feeling is that tech in South Africa has grown up. Legislation is easing, there is plenty of venture capital money from both media, communications and private investors to be thrown around - in general the industry is growing up.

But part of this growing up process is going to be a demand to differentiate between cool concepts and viable business models. This I think is where venture capitalists have a big role to play making 'hands on' type investments.

There is a lot of talk about "social networks" having the potential to make money because they attract niche markets to their sites and try to develop return traffic which must 'surely' have some way to be monetised.

A lot of these social networks / social tools are bleeding money and using the excuse that once they reach a "critical mass" they will be able to start making money - but the question has to be asked - will they EVER make money.
Will somebody start to pay for something if they have been used to getting it for free?

USEFULNESS vs. COMMERCIAL VALUE

We have some really good tech concepts and businesses in this country - but if we can't differentiate between something that is useful and something that is commercially viable how can the country build solid investment in its venture capital market?

OR... (And I don't have the answer so I am throwing this question out there)

Do you take the view that something like Muti or Afrigator for instance is an ENABLER and by owning the ENABLER you give your chance to break into the commercial market as well?

Absa Capital buys 10% of Dark Fibre Africa

2008-09-10T04:27:00.000-07:00

Saw this notice from ABSA Capital / I-Net and thought it might be of interest to local venture capital industry participants

Johannesburg, Sep 10 (I-Net Bridge) - Absa Capital, the investment banking division of Absa Bank Ltd, has bought 10% of Dark Fibre Africa (DFA), a local telecoms infrastructure provider, it announced on Wednesday.

Based in Centurion, DFA, installs carrier neutral broadband ducting infrastructure, and sells and maintains discrete fibre pairs, or cables, to individual telecommunications operators.

The acquisition follows last month's high court decision involving the Independent Communications Authority of South Africa (Icasa) and telecoms firm Altech (ALT) that Altech has the right to self provide its own network under its Value Added Network Service licence.

The move is expected to open floodgates of VANS licensees seeking to build their own networks, but Absa Capital's Infrastructure Equity Investment official Sollie Nortjé said many of the 300 or so VANS licensees did not have the financial muscle to roll out large networks.

He said it would make strategic and "financial sense" for VANS licensees to use DFA's network, because it would reduce the cost of building duplicate networks without affecting their competitive positions. Unlike Telkom, MTN, Vodacom and Cell C, DFA does not compete with operators - it only builds network capacity designed to be shared by operators, said Nortjé.

Nortjé's comments comes as Absa Capital announces a 10% acquisition in DFA and, along with Absa Corporate and Business Bank, finalises agreements to provide a mezzanine facility of 250 million rand and a senior debt
facility of up 700 million rand as a first round of funding to DFA.

DFA is spending 2 billion rand in the next 12 months on to deploy broadband infrastructure across South African cities, which could be leased by multiple operators.

Other major shareholders in DFA are VenFin and Community Investment Ventures.

Private Equity World Africa 2008

2008-08-31T18:20:00.000-07:00

The leading African private equity and venture capital event in South Africa according to the organisers.

Private Equity World Africa 2008 is a senior level conference giving you strategies and tactics for investing in private equity.

For delegates

* Close examination of private equity in the African continent – North Africa and SADC focus
* Debt capital markets – where are the best opportunities?
* Successful LP’s and GP’s relationship – looking at the good, the bad and the ugly
* Making private equity investments flexible for institutional investors
* Exit strategies in emerging markets – investigating their strengths and weaknesses
* Investing in mid-cap market – clarifying the value proposition
* New role of venture capital in South Africa

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Maxum Incubator

2008-08-19T22:41:00.000-07:00

The Maxum Incubator, together with University of Pretoria and IdeaBank are organising the first pre-incubation offering for young online entrepreneurs.

Read full details on Ismail's post here .

NEW PRIVATE EQUITY FUND LAUNCHED TO INVEST IN AGRIBUSINESS IN AFRICA

2008-08-16T08:25:00.000-07:00

A new R700-million private equity fund has been launched with the aim of investing in the buoyant agribusiness sector across sub-Saharan Africa. The Agri-Vie Fund, formed by Sanlam Private Equity and the investment group Strategy Partners, will focus on entrepreneurs involved in the agribusiness value chain, rather than directly in the farming industry. It offers an opportunity for potential investors to tap into this growing African market and gives strategic assistance to the owners of agri businesses.

The fund recently had its first close at R330-million, with initial investments from the insurance industry and development finance institutions such as the Development Bank of Southern Africa (DBSA), Industrial Development Corporation (IDC) through the Risk Capital Facility - a fund established by the European Community and the government of South Africa and managed by the IDC - and the US-based Kellogg Foundation. The fund is open to other investors until May 2009.

Pieter Kriel, chief executive of Sanlam Private Equity, said that agribusiness is the mainstay of the economy in most sub-Saharan countries. “On average the gross domestic products in sub-Saharan Africa have grown between six and seven percent in the past three years and the number of democracies has more than doubled since 1999. The resultant effect is that these countries offer exceptional opportunities for investors.”

The fund will look at businesses which offer value-added components along the agri-business value chain. “We will not invest in farms, but rather in the processing and marketing of farming outputs such as food, certain beverages and fibre products. By following the route of expanding the industry, it will ultimately create new growth opportunities for existing and emerging farmers. In addition, Agri-Vie's mandate includes investment into ecotourism in the context of integrated rural development,” said Kriel.

Emile du Toit, the divisional executive for private equity at DBSA said, “Agribusiness is an important contributor to economic growth in the region and is poised for significant expansion. Given the significant lack of equity risk capital to finance agribusiness transactions, the DBSA’s participation in this fund allows it to play a catalytic role in developing financial infrastructure to provide access to much needed long-term risk capital in this critical sector.”

Du Toit added that sustainable investment in agriculture can make a significant contribution to socio-economic development, in keeping with DBSA’s development mandate. “I believe that several countries on the continent have comparative advantages in agriculture, which provide a logical base for economic growth.”

Agri-Vie investors have appointed an active management structure, led by Herman Marais of Strategy Partners, which comprises members from Sanlam Private Equity and a women-led agricultural investment group, Makotulo Agricultural Company, among others.

Marais said that Agri-Vie is a true business partner for agribusiness entrepreneurs. “The fund contributes risk capital and management know-how to fully unlock the potential of businesses.”

He said, “Over and above the opportunities associated with the prevailing global food and commodities cycle, there is growing demand globally for various African exports such as organically grown vegetables, fruit and flowers, processed natural fibre for industrial applications as well as natural supplements and health products. However, there are numerous existing agri-enterprises across the African continent which are not performing to their potential - mainly as a result of lack of access to capital, limited market knowledge and infrastructure limitations.

“Agri-Vie aims to be a catalyst to unlock this potential to the advantage of the enterprises concerned, their host communities and the fund’s investors. Agri-Vie believes that sustainable development is best brought about by the disciplines of investment rather than aid grants.”

Kriel said that the fund had a strong empowerment focus. “Our involvement was partly spurred by the Financial Sector Charter which designates agri as an area of ‘targeted investment’. Both Sanlam Private Equity and Strategy Partners truly believe in the business and investment potential of agribusiness in South Africa and on the continent and are delighted to be playing a role in realising it. The South African portion of the fund was started with the express purpose of empowering agri-businesses and playing a key catalyst role for BEE in the agribusiness sector.”

Agribusiness women such as Ntombi Msimang and Jean Davidson are among the directors of the Makotulo Consortium. Kate Moloto, a shareholder in Agri-Vie’s investment management structure, says “Women are far behind with regard to participation as owners and managers in agribusiness. Through Agri-Vie, we intend to make a meaningful contribution to empowering women in this sector.”

Marais said the fund had found a niche in Africa and was already experiencing healthy transaction flow. “We have had significant interest from international investors and have formed a parallel structure to the South African portion of the fund – a separate entity domiciled in Mauritius which is focused on investment in sub-Saharan countries outside of South Africa. We are already evaluating more than 20 possible investments in South Africa and the Mauritius structure of the fund is looking at a similar number in countries such as Botswana, Tanzania, Uganda and Kenya.”

Venture Capital and SME Tax Incentives

2008-08-08T21:11:00.000-07:00

The sections which are relevant to the small business sector / venture capital are outlined below - section 12J (Venture Capital Companies) and the Sixth Schedule (Presumptive Turnover Tax).

Venture Capital Companies: pages 46 - 51 of the Bill (and 54 - 58 of the Explanatory Memorandum);

Presumptive Turnover Tax: pages 102 - 113 of the Bill (and 43 - 53 of the Explanatory Memorandum).

The SAVCA VC Development Sub-Committee will be meeting with National Treasury to discuss these proposed incentives.

Full details can be found on the SAVCA website

Business Partners to Welcome New Managing Director

2008-08-08T21:10:00.000-07:00

JOhann Rupert, chairman of Business Partners Limited – leading financier of small and medium enterprises in South Africa – announced at the company’s annual general meeting yesterday that Nazeem Martin has been selected to become Managing Director on 1 January 2009.

Mr Martin, currently deputy managing director will succeed Jo’ Schwenke, who will retire as MD on 31 December 2008.

“I am pleased to announce the selection of Nazeem Martin as succeeding Managing Director,” says Johann Rupert, “Nazeem is a talented and experienced leader, who has already made a significant impact on the small and medium business environment in South Africa. Business Partners is an extraordinary company, and I am certain that Nazeem will lead this company to new levels of success, despite the current difficult economic environment.”

At present, Martin heads up the company’s iKapa Business Unit, based in Cape Town. “It is an honour to be entrusted with the responsibility of leading a company that had such a positive impact on the SME environment,” he says, “and it is a privilege to succeed Jo’ Schwenke, under whose leadership and vision, Business Partners grew into a company respected and acknowledged internationally for its unique solutions to the challenges SMEs face.” Martin concludes by saying “our stability and success as a nation depends in large part on a vibrant, enabled and productive entrepreneurial sector,” says Martin, “and it is our intention at Business Partners to be one of the continent’s most significant forces for innovative entrepreneurial development.”

During the twelve years of Jo’ Schwenke’s tenure, the company’s investment portfolio has grown organically from R564 million at the end of the 1997 financial year to R1 672,1 million. It was also during this time that, under Schwenke’s vision and leadership, a unique investment model, which makes use of equity, royalty and loan financing, was developed. The Business Partners investment model for SMEs is internationally recognised as one of the most effective for use in developing economies.

“It is with a sense of satisfaction that I approach the end of my term,” Schwenke says, “and I believe the company will continue to build on its success under Nazeem’s able leadership. Nazeem’s solid educational background, previous business experience and excellent track record make him the perfect person for the job.”

www.businesspartners.co.za

Artificial Intelligence

2008-07-26T09:58:00.000-07:00

This is not strictly a Venture Capital related post but I think it is something that ties into the VC sector.

Artifiical Intelligence is one of the areas where Venture Capitalists might be investing in the next few years.

This blog post asked the question of whether a computer brain could ever have an "imagination" or be "creative".

Its a tough debate - maybe throw in your 10 cents worth?

InVenFin

2008-07-24T21:45:00.000-07:00

Former JSE listed IT investor, VenFin has launched a new fund called "InVenFin". The idea is to serve as a sort of incubator for innovative new ideas in the:

Engineering
Information Technology
Digital Media
Communications
Design
and Bio-technology fields.

www.invenfin.co.za

The fund has a starting point of R50 million to spend on new start-ups and combines money with the heavy hitting power of the VenFin management. If you have a really innovative and unique technology, then these are probably the guys who are going to take your South African bred technology to the world.

SAVCA Venture Capital Sub-Committee has released it Venture Capital development discussion paper

2008-07-24T21:36:00.000-07:00

This discussion paper attempts to establish a business case for growing the VC industry in South Africa, by outlining the critical role of the VC industry in the economy and highlighting the returns potential, albeit at significant risk, to investors.

The SAVCA Venture Capital Sub-Committee has released it Venture Capital development discussion paper. This discussion paper attempts to establish a business case for growing the VC industry in South Africa, by outlining the critical role of the VC industry in the economy and highlighting the returns potential, albeit at significant risk, to investors. It lists some of the challenges faced by a pre-emergent VC industry in South Africa. The document’s purpose is to elicit debate and define a response in respect of steps that can and must be taken to nurture this asset class, in order for creative destruction to lead to a sustainably vibrant, growing economy.

SAVCA will host two workshops (Johannesburg and Cape Town) to discuss the document’s content, recommendations and questions (which we feel require debate).

A copy of the VC development discussion paper can be obtained from the SAVCA Office

Author : SAVCA Office
www.savca.co.za

SA Venture Capital Strategist

2008-07-24T21:29:00.000-07:00

Over the last week I have attended different announcements for different venture capital, entrepreneur funding and incubator type offerings.

South Africa has an abundance of money to fund these start-ups but very few resources for tracking where and how the different funds are investing.

This is a pity because many of them fully publish the details, the mainstream media often overlooks these investments because they don't carry sufficient weight or "proof of concept".

The aim of this blog will be to try and track what the major funds are doing, where they are investing their money and the kind of concepts they are looking at.

If you have further news or information on this sector please feel free to drop me an e-mail at newsdesk@rival.co.za