Former First National Bank CEO Michael Jordaan has expressed disappointment at Mxit’s commercial closure.
Mxit announced on Friday that it is shutting down its commercial operations and donating all of its intellectual property and technology assets to independent public benefit organisation The Reach Trust.
The business further announced that Jordaan, who has been Mxit chair for the past two years, will not actively be involved with the operations of The Reach Trust.
“[I am] disappointed but also happy that it can help free education in South Africa,” Jordaan said in an e-mail.
The Reach Trust, which is taking over Mxit’s technology, has been providing free services such as text-based counselling and education initiatives to up to 10m people since 2012.
In a statement on Friday, Mxit said its monthly active user base in South Africa was just 1,2m users in July 2015.
WhatsApp has more than 10m users in South Africa while Facebook has 13m users, according to recent research from World Wide Worx and Fuseware.
Jordaan said Mxit’s shrinking user base could be attributed to “customers switching to WhatsApp when they upgraded from feature phones to smartphones” and Mxit taking too long to adapt to smartphones. Mxit was launched in 2005 on feature phones.
Jordaan further said that Mxit “could have been WhatsApp if it had acted two years faster”.
Jordaan became chairman of Mxit after the social network’s former CEO, Alan Knott-Craig, stepped down in late 2012.
Jordaan also heads up Montegray Capital, which is his start-up investment vehicle.
He said that he has invested in 15 start-ups, with Mxit not being one of them. He also said that he’s involved in another five start-ups.
“[The] most exciting tech development is [the] ability for prices to drop in many industries and in some cases even become free,” Jordaan said.
He further provided advice to budding start-ups in South Africa in light of what’s happened to Mxit. “Smartphones change everything. Make them a key part of your strategy, regardless of industry,” Jordaan said. — Fin24
