BetTech Secures Multi-Million Rand Investment From 4Di Capital

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 They are outdated and are having to regularly redevelop and re-engineer to ensure that they keep abreast of market demand,” says BetTech director Jesse Hemson-Struthers.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

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

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

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

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...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.