Endeavor South Africa: Quarter 3 Newsletter 2023
Dear Friends of Endeavor,
As we head into the final quarter of the year and the final stages of the Rugby World cup, we’re reminded of how inspiring it is to watch our teams, both the Springboks and Endeavor entrepreneurs, compete and have a chance to win at a global level. This makes us proud. Thanks to you, our board members, mentors, partners, investors, and entrepreneurs in the Endeavor network, who are the true enablers. The impact that is ignited by a successful team cannot be underestimated and is vital in our ecosystem. We remain as ever, committed to supporting South African entrepreneurs to dream big, scale-up and pay-it-forward and on a global scale. Good luck to the Springboks!
Endeavor’s mission is to drive economic growth and job creation by working with high-impact Entrepreneurs, who are solving real mass-market problems. Despite current economic distress, the 60 businesses that Endeavor South Africa works with have achieved remarkable results — generating close to R12bn in revenue in 2022, with a growth rate of +70%p.a. while attracting +R8bn in VC investments. And the 17 tech-enabled companies invested in by Endeavor South Africa’s Harvest Fund II, have collectively grown their revenue by 123% per year and created approximately 4,400 jobs in the past two years, of which 75% were for black Africans and 90% for youth. Read more in this op-ed featured in the business day.
We remain firm in our thesis of support and opportunity of South Africa’s burgeoning venture ecosystem and are raising our second co-investment Fund III, to continue to back our best-in-class entrepreneurs and investing alongside our capital partners, whilst walking the walk with 100% of the GP carry being reinvested back into the ecosystem. Together, we’re being backed by USAID to catalyze private capital for early-stage African high-growth companies to accelerate jobs and business growth across the continent. Please be in touch if you would like to invest, the fund is open to our Endeavor network, many of whom are already LPs, subject to a R1m minimum. The first close is set for 2024 Q1.
We are thrilled to welcome Shirley Maltz to the Endeavor South Africa Board, bringing with her no less than +25yrs in leadership roles in retail and financial services. Shirley is the Executive Chair of HomeChoice International PLC established Weaver plc, the group’s Fintech division. As a reminder, Endeavor Board members pay for their board seat and share a passion for entrepreneurship, as Harry Stebbings recently shared (see podcast below) — ‘the most successful people want to share’.
It is wonderful to share the news of GreatSoft’s (Endeavor entrepreneur, Bruce Morgan) successful exited to Canadian Vela Software, a subsidiary of the world leading software group Constellation. Proudly founded out of Cape Town in 2000, GreatSoft serves +1000 blue-chip customers across Africa and Australasia with high-quality CRM solutions for accounting practices. A massive congratulations to GreatSoft — a huge milestone and example of South African SaaS entrepreneurs scaling and successfully exiting — read more here.
Local Endeavor Events & Network News
We loved seeing the network at our ‘Spring’ Endeavor Connect events. In JHB, Co-founders, Coen and Tauriq shared the remarkable story of Tymebank, which has grown to +7 million customers in just four years. They assured us ’they are only just beginning’. In Cape Town, an outstanding Endeavor network panel discussed ‘African Expansion’ — Endeavor unicorn dLocal, along with SweepSouth, and Yellow — all paying-it-forward and sharing their learnings.
Further afield, we hosted a suite at CogX held in London’s O2 connecting investors, entrepreneurs and mentors at this pre-eminent content rich festival with a focus on the impact of AI. Melvyn Lubega shared his Go1 journey and we got a front row seat to listen to Inflection AI by Linkedin Co-founder and Endeavor Catalyst Chair, Reid Hoffman sharing his thoughts on Ai and the art of the possible, noting “the future is stranger and sooner than you think’!
Magic can happen in a network…and it does frequently at Endeavor with this good news story. Two Endeavor South Africa companies come together to serve their nation. Endeavor Entrepreneur, HelloPaisa, and Local Scale Up Entrepreneur, AURA have teamed up to democratize access to critical services for township spazas. HelloPay, which supplies small businesses and spaza shops with digital payment solutions, is now offering free business insurance and emergency response services through AURA to its 18,000 township customers.
Our Endeavor entrepreneurs continue to be recognised for the solutions they are building:
- Entersekt, led by CEO Schalk Nolte, has shown stellar US growth: ARR +191% & US customers +220%.
- SPARK Schools Soweto is a Top 3 finalist for the 2023 World’s Best School Prize for Community Collaboration by T4 Education.
- Tribe Fintech, led by Mo Harvey, is one of five businesses chosen for Mastercard’s inaugural Start Path Program for Small Business Solutions.
- Talk360 launched their 1st retail location in South Africa, and
- iiDENTIFii took second place in the Visa Everywhere Initiative.
Endeavor South Africa welcomes 3 edtechs to join Local Scale Up:
- Yenza is an edtech offering career pathing and employability through a skills assessment utilising psychometry and data-science,
- Koa Academy provides an IEB education through an online learning environment that is both structured and individualised and
- Resolute Education is an e-learning company that offers robotics and coding courses for schools.
Endeavor Global News & Research
The Endeavor World-wide gathering in Istanbul Turkey this quarter featured four South African entrepreneurs among +100 attendees. Sidar Sahin, founder of gaming company Peak (an Endeavor entrepreneur) shared his real, unfiltered success story with Peak acquired by Zinga (now Take-Two Interactive) for a whopping $1.7B. No shortage of dreaming big and scaling but one that takes guts, sacrifice and many, many hard learnings along the way.
Endeavor’s annual world class executive education program at Harvard Business School with “Scaling Entrepreneurial Ventures”, and Stanford University Graduate School of Business “Innovation & Growth Program” was attended by 3 of our local Entrepreneurs: Nic Ray, CEO of DataEQ, Sam Clarke, CEO of Skynamo, and Timothy Nuy, co-CEO of Fin, joining a wider group of +150 Endeavor entrepreneurs and their leading C-levels, representing 35+ nationalities, for one week in both Boston and San Francisco. All in all a diverse crowd, but with one common thread: scaling innovative companies in under-the-radar markets.
Also, this quarter saw the opening of Endeavor Portugal — we look forward to exploring SA-Portuguese connections.
Global Endeavor Catalyst’s mid-year view on venture capital in emerging and underserved markets highlights recent trends: extension and insider-led rounds, bridge rounds, SAFE notes, convertible notes and venture debt. Inward operational focus has also increased. While down rounds accounted for 20% of global venture rounds in Q1’23, fundraising persists for founders addressing continent specific challenges with fewer ‘tourist’ investors. All in the link above.
In Global Endeavor Entrepreneur news:
- Pismo (Brazil), was acquired by Visa for no less than $1 billion, making it the largest fintech deal of the year.
- In Ireland, Aidan Corbett and Jack Pierse of Wayflyer (revenue-based financing), announced a US$1B financing deal with investment firm Neuberger Berman.
- In Italy, Luca Cartechini and Gian Maria Gramondi, Co-Founders of Shop Circle announced a jaw-dropping $120M Series A. Not surprising for a company that just reported a 360% year-on-year growth.
Other rounds included Brasil Endeavor entrepreneur Rubens Zanelatto, Founder and CEO of Mottu, which announced a US$50M Series C.
Endeavor entrepreneurs João Del Valle, Wagner Ruiz and Alphonse Voigt, co-founders of EBANX, launched their Africa division, a south to south move we’ve been seeing more and more, particularly between LatAm and Africa, and visa versa. From dLocal to Paga Group Ltd and from Tribal to Migo. In this case thanks to a deep-dive by Timothy Motte for the Realistic Optimist.
That’s all for this quarter’s Endeavor South Africa Newsletter. Stay tuned for more updates and inspiring stories from the world of high-impact entrepreneurship and looking forward to more South African wins!
Ever wondered what it takes to build a Unicorn?
In this fantastic piece of research, Endeavor studied the career journeys of 100 of the top emerging market unicorns & 100 top US unicorns — key takeaways:
- Explore the world. 55% of top US unicorn founders are immigrants or second-generation immigrants (mostly India, Israel, China, Ukraine, Canada, and Russia). 32% of the top unicorn founders in emerging markets are immigrants or second-generation immigrants. 66% of founders studied or worked abroad.
- Education is important but it doesn’t have to be from a top university. 97% of top unicorn founders obtained a college diploma but less than 50% completed study at an elite university.
- Study science or engineering rather than business (61% vs 19%).
- Forget about consulting, investment banking, or big tech as a training ground. Only 20% of unicorns founders worked for them.
- Keep launching startups. Half of unicorn founders started a business prior to launching their unicorn company.
- Accumulate experience (+10 years). Successful founders are not particularly young or a college dropout.
Endeavor’s Scale-Up Insights Season 4
Melvyn Lubega, along with fellow Endeavor Entrepreneurs, Ken Njoroge of TwigaFoods in Kenya, Alex Chatzieleftheriou, of Blueground, Jose Jair Bonilla of Chiper in Colombia, Firat Isbecer of Commencis in Turkey, and Mohamed Azab of Grinta in Egypt share their learnings in this series of learning videos from our Endeavor Insights team, addressing business fundamentals as shared by founders. The latest episodes of Endeavor’s Scale Up Insights Season 4 is titled ‘‘how to create a culture of adaptability, design strategy-aligned incentives, and prepare for the future of work’. Don’t miss this excellent open resource.
Two long-time Endeavor mentors and veterans from the VC world in Latam, both Shu Nyatta and Marcelo Claure from Bicycle Capital being interviewed by Harry Stebbings from The 20 Minute VC (20VC). Spoiler alert: learn why they called their Fund ‘Bicycle’ — one of the greatest and transformative technological inventions ever.
