Former First National Bank CEO Michael Jordaan, who joined the board of social network Mxit as chairman in September 2013, has acquired a stake in AngelHub Ventures, a Cape Town-based company that provides seed funding to start-up businesses.
Kevin Harris, who has worked in equities trading at Rand Merchant Bank, both in South Africa and in London, has co-invested with Jordaan.
Jordaan and Harris replace original investors Keet van Zyl and Andrea Bohmert, who are now focused on a new venture called Knife Capital.
AngelHub Ventures founder and CEO Brett Commaille says the timing was perfect for everyone, including providing funding to its former investors.
The company, which has rebranded itself from AngelHub to AngelHub Ventures following the investment by Harris and Jordaan, says its focus is on investing in promising young businesses that are using technology in innovative ways.
The company has a pool of cash available for investments and, unlike before, won’t have to seek funding on a deal-by-deal basis.
“A key new differentiator is the ability to use the strengths and resources within companies in our larger investment group, such as Mxit and Multisource, to give the investees an unfair advantage,” says Commaille.
He adds that AngelHub now has a wider product offering, better access to markets, and assists with skills and technical resources that start-ups could not necessarily afford on their own.
“We know there are good opportunities in the South African start-up scene, and many of them have learnt some early market lessons that make them attractive investments with a few important experiences in the bag,” he says.
One of AngelHub’s first investments is in execMobile, which helps international travellers avoid mobile roaming bill shock. Further investments are in the pipeline, with Commaille saying he will be able to provide details once the “ink has dried” on the deals.
Meanwhile, Jordaan says he has been inundated with requests to “drink coffee” with start-ups and needed a “strategic filter” to evaluate all opportunities.
“In the venture capital space, it is crucial to have a disciplined investment process, and AngelHub has built these competencies over the years. We now have regular, weekly investment committee meetings, which allows us to make decisions quickly but properly,” Jordaan tells TechCentral.
A distinct advantage of not managing external funds, according to Jordaan, is the ability to make decisions for the long term and not necessarily look for an exit.
Jordaan says that although the team at AngelHub loves technology, the businesses it invests in will not necessarily be technology companies per se. Rather, they’ll offer disruptive business opportunities enabled through technology.
“Tech is inherently scalable and since we look for businesses where that can grow with more variable costs than fixed ones — following lean start-up principles — it is likely tech will be involved in an enabling role,” says Commaille. — (c) 2014 NewsCentral Media
