South Africans are full of ideas. You’ll hear all kinds of good ideas in coffee-shop conversations and networking events, from friends and family who have identified a problem and given vague thought to a solution. Those with entrepreneurship in their bones will go as far as to map out their ideas and start a business plan. Those ideas often require some funding, a corporate sponsor, an angel investor or a partner with deep pockets. After all, an idea is only as good as its execution.
We are fortunate to be living in a time where technology is the foundation of so much of what we do. A digital world makes it easier to connect with like-minded entrepreneurs, potential investors and even big corporate brands who want to support growing businesses. Investment can come in many forms, including finance, dedication of resources and skills, equipment or even the use of a boardroom for meetings in a professional setting. As Industry 4.0 continues to make an impact on our daily lives, the likelihood of finding investment increases.
South Africans are Investing in South Africans
Silicon Cape notes that the number of South African venture capitalist transactions went up by 134% between 2015 and 2016. 30% of those investments were made in the ICT sector, and more than half of those investments were concluded in the Western Cape. The Mother City is where 60% of the country’s startups are based. 1200 early-stage investors have invested in South African startups since 2015.
Cape Town is home to 25 accelerator programs and 25 co-working spaces. On average, one accelerator program will support 10-15 startups in a year. These numbers are evidence that we know we have good ideas, but that we lack the tools, resources or facilities to turn these ideas into reality. Accelerators are dedicated to connecting the right people – funders and entrepreneurs with brilliant business plans, developers and people with plans for an app, mentors and those who need support in building a business. The list of connections facilitated by accelerators is endless.
Silicon Cape is a network created to facilitate this kind of support for local entrepreneurs. It started out as a passion project in 2007 by two venture capitalists. They had visited San Francisco, the home of Silicon Valley, and believed Cape Town could become South Africa’s tech hub. The small team is dedicated to growing the country’s entrepreneurship ecosystem, connecting relevant stakeholders and working with government to ensure policies support growing businesses.
Corporates are also looking for small businesses with big ideas. MTN Business is one of those corporates who dedicate a lot of time and resources to investing in entrepreneurs. One example is the Mind2Machine Awards created to find innovative solutions in IoT. The winners receive training on the MTN IoT platform, get access to free software and hardware during the conception phase of the competition, and plenty of media attention. Standard Bank launched an incubator programme with free co-working space for startups, access to training and mentorship. Allan Gray launched a foundation specifically for those who want to complete their studies and want mentorship from leading entrepreneurs.
Which Sectors are Investors Currently Interested In?
While having a great idea and a solid business plan in any sector is worth pitching to investors, there are 8 key sectors that corporates are currently investing in. Retail, tourism, asset management, business process outsourcing (BPO), agri-processing, sustainable energy, oil and gas are the attention-grabbers of 2017/2018. Tech, naturally, is part of the list too. However even if your business isn’t about technology itself, consider how technology has affected your industry and how you use tech to make your business better, unique or more efficient.
Local Businesses enjoying Global Attention
South Africans are attracting global attention all the time. Airbuy is a payment gateway which allows ecommerce sites to accept payments without using a debit or credit card. Users can pay with Airbucks instead. The business recently received funding from Amazon so they can continue to develop the product and cover day-to-day expenses. A golf startup known as Tagmarshal received funding from European angel investors in 2016 and 2017. The system they sell helps golf course managers encourage a faster pace of play so revenue can be increased. They are now expanding into the US market.
If you’ve recently purchased tickets to an event, you may have used Quicket. The online ticketing platform has been running successfully in South Africa since 2011 and is now expanding into Uganda. Whether your business is just getting started, or has been established for a few years, global expansion is always a possibility if you have what investors are looking for.
When your meeting doesn’t go as planned, or it feels like your business isn’t going anywhere, remember these stats and stories. Spend a few months in a co-working space or join an accelerator program, because the breakthrough might come from a fresh set of eyes on your strategy or a few more brains in the brainstorm.