HLAYISANI CAPITAL APPOINTED NEW FUND MANAGER OF ENDEAVOR SOUTH AFRICA HARVEST FUND
14 November 2019
Endeavor and Hlayisani partnership aims to nurture and develop South African and African SMEs
The latest data released by Statistics SA in October 2019 estimates South Africa’s unemployment rate at 29.1% – the highest it’s been in over 16 years. Small businesses are the only viable solution to generate the scale of growth required to bring about real employment.
Yet, small, medium and micro-sized enterprises (SMMEs) remain largely underfunded. While financing to large business has increased since 2008, it remains low for SMMEs. This is according to the South African SMME Access to Finance report published by FinFind, an online platform that links small businesses to funders in July 2019. The report estimated the funding gap to SMMEs at between R86-billion and R346-billion.
Hlayisani Capital’s newly launched Hlayisani Growth Fund aims to bridge this gap by providing capital and strategic support to develop high-growth small and medium enterprises (SMEs). Hlayisani Growth Fund is founded on corporate governance values that take South Africa’s socio-economic needs for greater diversity and inclusion in the domestic economy into account. Investments are assessed on their ability to return sustainable economic returns, promote industrial expansion, inclusivity, employment and to deliver on social development impact objectives. Endeavor’s Harvest Fund currently has R45m assets under management. Endeavor and Hlayisani are actively engaging with investors to increase this investment commitment significantly to drive growth of SME businesses.
Endeavor is a global organisation that helps to accelerate the growth of high-impact medium-sized entrepreneurs, both by creating opportunities to raise growth capital and by providing access to the right mentorship, markets and business networks. Endeavor has an unparalleled international network leveraged to the benefit of Endeavor Entrepreneurs. The Endeavor Harvest Fund was established to provide an investment vehicle that enhances the support that Endeavor provides to high-growth, high-impact businesses by investing equity capital. Hlayisani has been appointed the new fund manager of the Endeavor Harvest Fund and will be managing the Harvest Fund investments inside the Hlayisani Growth Fund going forward.
This first Harvest Fund was started by Endeavor and AlphaWealth, setting the stage for this exciting next phase of expansion for the Harvest Fund. AlphaWealth is one of the largest independent financial advisory firms in South Africa, which provides investment and wealth planning services to selected clients, and will continue to work closely with Endeavor and Hlayisani on other initiatives.
“By leveraging the Hlayisani Growth Fund, Hlayisani is able to support and contribute to the revenue growth and investment goals of Endeavor Entrepreneurs by providing access to specialist strategic skills and capital to complement our existing team and efforts,” says Alison Collier, Managing Director of Endeavor South Africa.
According to Dr Eugene van Rensburg, Director and Investment Principal, Hlayisani Capital, “Collectively, the Hlayisani team has intensive experience in the SME arena as operators and investors. The team has built and invested into businesses that generate significant local and international revenue and which positively impact employment growth and the implementation of world class governance standards in the South African market.”
Moreover, Dr van Rensburg adds, “Our team has a broad range of expertise relevant to the new fund, particularly as relates to what is required to structure SMEs for large-scale operations and success. We have a strong track record in private equity and venture finance with unique access to proprietary deal flow and the ability to capitalise on investment opportunities that deliver superior returns.”
Hlayisani and Endeavor will leverage each other’s respective skills, expertise and resources for the mutual benefit of the entrepreneurs invested into by the Endeavor Harvest Fund and Hlayisani Growth Fund. They will leverage the rigour of the Endeavor selection process, mentorship programmes, and market access to accelerate growth and maximise entrepreneurial governance support structures to identify suitable high-impact entrepreneurs for investment. After investing, they will assist these investee companies to attain their growth objectives as well as the investment return and impact objectives of the fund. Hlayisani will expand its contribution to Endeavor’s mentorship programmes locally and globally and both partners will seek opportunities to collaborate on investments.
“Working together, Endeavor and Hlayisani are able to play a significant and important role in nurturing and developing high-growth, high-impact South African and African SMEs,” says Dr Reuel Khoza, Chairman of Hlayisani Capital.
DR REUEL KHOZA, MICHAEL JORDAAN AND ANGELHUB VENTURES START GROWTH EQUITY FUND
1 November 2019
Hlayisani Capital offers strategic support and capital to high-growth, high-impact entrepreneurs.
Three years in the making and operational since early 2019, the noteworthy team behind Hlayisani Growth Fund are adding value to a number of enterprises in Southern Africa with investments to the value of c.R200 million already made. The team is currently engaged in discussions with potential local and international investors keen to participate in their current investment raise.
Focused on the SME ecosystem, Hlayisani Growth Fund offers high-growth private equity investments in South Africa and Africa. The fund specialises in growing SMEs into large, successful enterprises that operate across multiple territories, create jobs and generate export revenue domestically. Target businesses are those that demonstrate sustainability, growth and investment return while including in their strategy focus on the appropriate environmental, social and governance impact of the business.
“Big business in SA spends R100 billion on outsourced services offshore,” says Principal, Brett Commaille. “This could be redirected into SA if we developed skills. There are many SMEs working to solve this problem – including those in the education and skills development space. This is just one of the investment opportunities for SME-focused funds to support and play a key role in driving GDP growth.”
Hlayisani focuses on investing in SMEs to deliver economic return and socio-economic impact. Information, Communication and Technology (ICT) and Manufacturing form the strategic focus of investments. ICT underpins the other investment focus areas as a key enabler and lever, while manufacturing is at the heart of technological change, driving industry growth and employment.
Looking forward, Group Chairman, Dr Reuel Khoza says, “The Hlayisani investment team has a strong record in private equity and venture finance with unique access to proprietary deal flow. We are uniquely experienced and placed to seize high-growth opportunities that are positioned for outstanding investment returns while delivering socially responsible and measurable impact.”
Investments are focused on the following enterprises:
- Agricultural innovation
- Medical innovation and services
- GoMetro (Flx) – designs, sets up and operates scalable and flexible mobility platforms for transport operators around the world.
- Snapplify – an educational content platform and the largest ebook aggregator in Africa.
- Opennetworks – the first Google Premier Partner in Africa, with extensive experience in cloud computing and managed services, helping businesses move onto the cloud.
- Sudonum – helps businesses around the world improve their ROI, understand the effectiveness of their marketing, and deliver better customer experience through call tracking and analytics.
- Ikeja – A wireless network provider that uses bespoke solutions to provide internet connectivity to locations that are densely populated but underserved, such as the informal settlements of South Africa.
- Lean Enterprise Accelerator Programmes (LEAP) – manages enterprise and supplier development for large businesses, providing business support, access to markets and shared resources for entrepreneurs.
Additional deals are in the pipeline and will be announced soon. Meet the team behind the pre-eminent African private equity investment company here.
“Collectively, the team has extensive experience and expertise as investors and operators. This, we believe will help to unlock value for our entrepreneurs and our investors.” says Michael Jordaan, Investment Committee Chairman.