Business Insider Edition

Three SA startups told us how they landed at least R340,000 each in funding

Phumi Ramalepe , Business Insider SA
 Jun 09, 2021, 06:21 AM
Wooden people with money helping young enterpreneu
  • KOA Academy, Candor Select, and AYA Africa are some of the startups that have managed to secure over R300,000 each by presenting a 10-slide pitch to investors through Startup Circle.
  • Startup Circle is a practical business school that connects entrepreneurs to investors and prepares them to pitch for funding.
  • The startup owners shared tips on what to say when talking to potential investors.
  • They agree on some key messages, such as showing your business is scalable, profitable, and has traction before receiving funds.
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South African companies are securing funding of between R300,000 to R400,000 for each of their businesses, with 10-slide pitch decks presented to investors in the space of three minutes.

They do so via the Startup Circle, a business school that connects entrepreneurs to investors.

We spoke to some successful alumni about what it took to land the cash. 

Here is what three South African startups say it took to land their first funding rounds of at least R300,000.

KOA Academy

Koa Academy, a full-time online school for children learning from home founded by Lauren Anderson and Mark Anderson secured funding of $30,000 (just over R400,000) in total.

The school, which cover Grades Four to Nine, launched in 2021. With their 10-slide pitch the company secured $25,000 from Enygma Ventures, a US venture capital firm, and $5,000 from the CEO of Fedha Group, Dhruv Pandit.

According to Anderson, investors need to know that you are interested and invested in what you are doing, and not just trying to make a quick buck.

"Investors often invest in people who are building businesses and not just a business idea. They want to know that you're in it to win it," he said.

Anderson also advises that your presentation to investors needs to be clear and concise.

"It has to demonstrate profitability in a short space of time because investors want to know if they're going to get a return on their investment in a short period of time.

"They want to know specifically what the money is going towards. They want to know projections for the first one year, two years, and five years to get a sense of how we expect our growth curve to go over the next few years," he said.  

These are some of the tips Anderson had to share:

  • When approaching and pitching to investors, be open-minded and be willing to shift plans.
  • Be willing to change your ideas quite quickly based on good advice and ongoing feedback from customers.
  • Don't get stuck in the mindset of "you know best for the business".
  • You need to show investors you have a good understanding of your competition.

Anderson said the plan is to use the funds to launch their Grade 10 to 12 programme in 2022, which will culminate in an IEB Grade 12 school certificate.

"We are also excited to currently be closing a round of seed funding to accelerate our growth," said Anderson.

Also see: This SA startup school says it can help you get investors, in 3 minutes, for R16,300

Candor Select

Candor Select is an online platform that enables resellers, bulk buyers, and traders, mostly from rural areas and townships, to resell on its platform.

The company, founded by Lelethu Shayi, also secured itself $25,000 (R340,000) from Enygma Ventures after pitching last year.

Shayi said showing traction and scalability is what got the company ahead.  

"It was showing the traction that we had before even getting any investment. It was showing them our business model, the scalability of it and what we needed in order for us to grow," he said.  

Shayi's advice to entrepreneurs who need funding and are willing to approach investors is to:

  • Show traction. Inform investors what you have done without any outside investment.
  • Show investors that there is some money coming into your business.
  • Show that your idea is commercially viable to invest in.
  • Do you believe in your own business? Motivate why someone should invest in it.

AYA Africa

AYA Africa is an online marketplace and magazine that sells for "made in Africa" creative brands and artists. The company offers a digital presence and sales channel for African entrepreneurs. It has an end-to-end e-commerce solution that makes it easy for customers to support local in one place.

The company, which was founded by Caley van der Kolk, secured a $25,000 (R340,000) investment during the lockdown.

According to Van der Kolk, it's important for potential investors to know that you have a scalable business model and that as the CEO of your company, you can sell the business.

"It's not just about an idea," she said. "Investors need to know that your business will grow beyond where it is now and that it has scalability."  

Van der Kolk acknowledges that different investors look for different things, but what's important is scalability and a business that is technologically advanced.  

"If you're not building a scalable technological model then I think you're being left behind. These investors invest in women and scalable business models and the team.

"Investors invest in a person as much as they invest in an idea. 'Do you have the capability to grow this thing you’re talking about?’'," said Van der Kolk.

Since they received the funding, AYA Africa has built a digital marketplace that allows small scale creative goods makers, artists, and artisans, to house their own e-commerce store on a bigger digital platform.

To date, the company has onboarded 100 vendors on to AYA from South Africa, and plan to reach 500 in next two months. 

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