TMI | THE SOUTHAFRICANTREASURER 25 NEXT GENERATIONTREASURY Numerous studies have shown that job creationand higher incomes are associatedwith investing in earlystage businesses. Nowmore than ever, the South African economy needs the dynamism these companies have to offer. Numerous studies have shown that job creation and higher incomes are associated with investing in early-stage businesses. On average, these businesses spend over half of their budgets on their staff contingent. In addition, over a 10-year horizon these types of businesses will see a 5x increase in their employee base, which bodes well for job creation in South Africa. The country still faces fundamental challenges, in particular unemployment, which currently sits at 33.9%. It is these types of fast-growing companies that will help provide the impetus needed to emerge from this unemployment crisis. Early-stage investment – how it’s done Investment teams spend considerable time and effort identifying suitable companies and making investments where they believe they can propel the company’s growth to new heights and expand its reach beyond its existing footprint. For every 100 potential investments, perhaps only two or three companies receive the necessary funding. Yoco is a perfect example of an earlystage company that had a unique product offering and the right partners, which has seen the company flourish since its inception. When analysing a potential early-stage investment opportunity, these are some of the questions that should be asked: l Is there a large addressable market for what the company has to offer? l What is the developmental impact of the business? l Is the company in a high-growth market? l What does the company offer that others don’t? Does the company have a durable competitive advantage? l Is the business proposition groundbreaking and an agent of change in its industry? How does it compare to its competitors? l What is the revenue potential, is the business proposition scalable, and are there barriers to entry? l Does the business have a great management team? l Does the management team have an appropriate mix of technical and business skills? l Has the company gained traction in the market and is there proven demand for what it has to offer? l Are the company’s forecasts achievable (realistic)? l What could cause the business to fail? Mobiz – ticking all the boxes Investment date: November 2021 One company that has far exceeded these criteria is Mobiz, a promising marketing technology business based in Cape Town. Mobiz was an attractive investment because it has taken a unique skill - marketing - and used technology to allow companies of all sizes to run effective, customisedmarketing campaigns, positively impacting these companies’ bottom lines. Mobiz makes quality digital SMS marketing tools accessible to all types of companies, from small businesses to large enterprises. The Mobiz digital SMS marketing tool is characterised by an easy-to-use platform that anyone, at any skill level, can use to send professional yet impactful digital marketing campaigns to thousands of customers at scale. Using the Mobiz SMS digital marketing platform, companies can offer hyperpersonalised mobile landing pages to their customers. The key element of the platform is that the messages sent from the platform are dynamic and unique to that customer. The relevance of the message to a particular customer further enhances the business’s engagement with its customers and, ultimately, its sales conversion rates. Most importantly, Mobiz is backed by an impressive management team who have all the attributes of the type of entrepreneur you would like to back. In addition, the management team have deep industry knowledge of the marketing sector and their target market. Mobiz more thanmeets the requirements as an agent for change in the digital marketing sector, and the traction it has achieved to date is testament to the quality of the management team and the product. It is now attempting to raise the South African flag high through expanding into the very large US market. AMRISHNARRANDES, Head, Private Equity&Venture Capital, Futuregrowth Asset Management Amrish is a qualified Chartered Accountant with more than nine years of private equity experience. He is head of Private Equity &Venture Capital at Futuregrowth Asset Management, overseeing the origination and exiting of investments across a wide range of industries. He also serves on various portfolio company boards.
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