Kalido, a South African-developed smartphone app that helps people meet talented individuals around them and which its backers believe has the potential to be the next big global social network, has revealed that it has raised almost US$5m (R73m) in funding from angel investors.
The start-up, the brainchild of Indian-born former top Alibaba executive Sanjay Varma, is based (for now) out of a large house in Johannesburg’s leafy suburb of Saxonwold.
But Varma has plans to take the app global, with India and Australia already identified as the next markets following the recent South African launch. He’s eyeing the next funding round, too, when he expects the business could raise between $25m and $30m in additional venture financing.
But what makes Kalido different to the other platforms that promise to connect people? Kalido is different, Varma said, because it connects talented professionals with clients through a personalised matching system.
“Most networking apps, hiring platforms and interest groups connect you with random strangers far away, without helping you narrow down the best match,” the company said on its website. “Only Kalido ranks your matches, to help you decide the best person to work with.”
The platform finds “relevant matches that can help you with what youʼre doing right now”. It ranks these matches based on how close they are geographically and socially (a friend ranks higher than a friend of a friend, for example). Common contacts, networks and interests also form part of the platform’s matching algorithms.
Varma won’t disclose user numbers – the service was only recently launched in South Africa, its first market – but he said the user base is “diverse”, from teachers and musicians to accountants and sports coaches, and he is encouraged by take-up.
Launches around the world will be done in stages to avoid growth that is too rapid, Varma said.
Varma, who was raised in Hong Kong and educated in the US, explained that he considered a number of other markets in which to develop and launch Kalido, but eventually settled on South Africa because of the developer talent here, among other reasons.
“We went to Silicon Valley, India, Hong Kong and Australia to find where we can get the best development team. We found the people here in South Africa to be incredible,” he said. “Sure, you can get amazing people in Silicon Valley, but what we are developing could knee-cap established companies there, so we wanted to stay away.
“We found incredible engineers in South Africa with AI (artificial intelligence) experience. And when we tested the beta here, people loved the idea. With a high unemployment rate and good smartphone penetration, it’s a perfect market to launch Kalido.”
Varma certainly has the credentials to lead an Internet start-up with global aspirations. He has worked closely with Jack Ma, the founder of Alibaba Group, as vice-president of business development for the Chinese Internet giant (effectively, he was number three in charge during Alibaba’s formative years). He met Ma at an Internet conference in 1999 in Hong Kong, where his family has a trading business, and two struck up an instant rapport.
Varma quit Alibaba in 2002 to return to the family business with the intention of retooling it for the Internet age. He eventually founded his own business in 2007.
“I learnt that it’s really hard to find the right people to work with. I wanted to find someone who was formerly with a top-tier accounting firm but who would charge me lower fees and give me better service. I found those individuals had a tough time finding folks like me,” he said. The idea that would lead to Kalido was starting to take shape.
People are often in places like airport lounges not knowing who is around them, Varma said. “I’m walking past opportunity all the time. What if I could build a platform to say I’m looking for a website designer, or even a tennis partner, when I’m travelling? What if this app could match me with someone who is close to me, perhaps who went to same school as me or has a similar background? We are walking past thousands of people we could capitalise on all the time.”
Working with partners, Varma assembled a team of developers to build a concept beta. “The feedback was fantastic. Freelancing is a global movement now – people don’t want to work for corporates. You have all these people with amazing skills but nowhere to market them.”
Once installed, the app keeps sending users information about people around them who might make an interesting professional match.
The start-up set a target of raising $5m. “We are more than 90% there, with angels backing this – very senior folks from Goldman Sachs, McKinsey, and so on, successful people who have the patience to build what could eventually be a multibillion-dollar business.”
The angel investors include South Africans, but Varma declined to name them.
The company, which has 20 developers based in Johannesburg, is focused exclusively on mobile for now because this is what the South African market demands. A desktop version will come later. “Mobile is where it’s at. Mobile is huge in Africa,” Varma said.
Monetisation will also come later, once Kalido has built a meaningful user base. The focus is on ensuring each user gets “incredible value and that they feel empowered”, he said. “Once we understand how people are using the app, that will determine how we monetise it.”
He is also cautious about expanding too quickly, or blowing through the company’s funding. “A lot of start-ups fail because they spend too quickly on things like marketing. We have to have a safety net. Our mission is too important to take a big risk. But we do have global ambitions. The problem we are solving is a multibillion-person problem.”
Varma played down a suggestion that he’s building Kalido in order to sell it to an established player. “I’m building it to solve a huge problem. What greater gratification can I get than doing that?” — © 2016 NewsCentral Media
