December 2021 Newsletter
Dear Friends of Endeavor,
This quarter has been an impressive one, and not only for our Endeavor Entrepreneurs and pipeline companies, but also for the South African start-up ecosystem.
For starters, thank you to all of our Endeavor mentors who freely give of their time to support growth of the entrepreneurs in our portfolio. Special mention to Andreas Cambitsis, Nadir Khamissa, Lisa Klein, Grant Mackenzie, Kim Rey and Tinashe Ruzane who are the top six donors in 2021 outside of the Endeavor Board, mentoring +10hrs each in 2021.
The 30 SA Endeavor Entrepreneurs have achieved 63% annual revenue growth over the past four years and 2021’s growth increased to +69% compared to 29% in 2020, with an average annual revenue of R235m. Capital raising also jumped in 2021, with these teams raising +R5bn compared to R2bn in 2020 What’s more, these teams created +5,781 jobs over the past four years — resulting in a 21% annual job creation rate, and reaching a total headcount of 13,026 in 2021 (read more here).
The Endeavor SA’s Harvest Fund, a first of its kind fund in Africa, continued to capitalise on this growth trajectory with momentum picking up this quarter. The Fund has doubled in size to R130m since launching in February 2021, and has co-invested in another three Endeavor Entrepreneurs, bringing the total to six. This quarter, MFS Africa secured a $100m series C round led by Africinvest FIVE and Ozow raised a $48m series B round led by Tencent Cloud Ventures, with both receiving investments from Endeavor’s local Harvest and global Catalyst funds. In addition, Mobiz announced a $4.2m raise led by Futuregrowth in which Harvest invested, thus adding to a growing number of earlier stage businesses in the Fund.
It is great to co-invest in our growing Endeavor Entrepreneurs. In fact, given the deal flow has exceeded our initial forecasts, we have increased our target fund size by 50% up to R150m, with final close in February 2022. This means more impact for Endeavor and South African entrepreneurs in terms of revenue, jobs and private capital. Thank you to all our LPs who have committed their capital so far. It is incredible to have your support towards these high-growth businesses that are delivering strong returns AND making such a positive contribution. As a reminder, the fund is uniquely structured with the carry shared 80/20, in such a way that 20% flows directly back to Endeavor SA to be reinvested back into the next generation of innovative founders, thus kick starting a flywheel for investor and entrepreneur alike.
In other capital news, leading African-based security and medical response marketplace Aura secured R62m in a Series A funding round led by the MultiChoice Group (MCG), KLT Holdings and Buffet Investments. This sets them up well to pursue their exciting global expansion plans.
In other SA and African firsts, Go1 co-founder, Melvyn Lubega, became the first African ever to win Endeavor’s most prestigious global award — The Lindas — and is one of three entrepreneurs across Endeavor’s +2200 strong global network to receive this coveted prize in 2021. The two other 2021 Linda’s winners are Sergio Furo founder of Creditas, ,the largest credit fintech in Brazil and Achmad Zaky, who has transformed the e-commerce market in Indonesia with Bukalapak. Well done Melvyn for truly embodying the Endeavor spirit of dreaming big, scaling and paying it forward! Full write up here.
Endeavor is always looking for ways to improve the environment for high-growth entrepreneurship to thrive. To that end, Endeavor South Africa has joined forces with other startup ecosystem stakeholders to develop a Startup Act for South Africa — a call to the President to unleash the growth and innovation inherent in the country’s entrepreneurs and youth. This quarter, we were invited to meet with President himself during a special meeting held by the Presidential Office to share ideas on what exactly is needed to drive entrepreneurial growth in SA. We were encouraged to hear President Ramaphosa say, “With regards to the SA Startup Act, I would like us to consider that. If we are serious about promoting entrepreneurship, we need to think about how we boost startup activity.” We are actively lobbying and are cautiously optimistic. Please click here to join the movement.
All in all, it has been a strong quarter and we are looking forward to 2022 and more of these good news stories. But first, a well-earned break. As someone wise once said: it’s not the nouns, verbs or adverbs that are the most important in life, but the punctuation marks! Wishing you all a safe and restful time with family and friends this festive season.