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SAVCA NEWSLETTER FEATURE: Q&A with Kalon Venture Partners

Kalon Venture Partners CEO, Clive Butkow.

Kalon Venture Partners CEO, Clive Butkow.

SAVCA speaks to Kalon Venture Partners CEO Clive Butkow to tell us more about the name change, deal activity highlights and their outlook for the next year and beyond.

Tell us a bit about Kalon Venture Partners.

CB: Kalon Venture Partners (formerly GroTech Limited) is a Section 12J Venture Capital Company which invests in and builds a portfolio of high growth digital technology companies, with innovative business models, disruptive technologies, large markets and exceptional entrepreneurs.

The board decided that the Grotech brand did not convey our Vision of being “The pre-eminent digital technology Venture Capital Company on the African continent by investing in and growing entrepreneurs who solve African and global problems”. We decided to rebrand in order to further develop our identity and to grow the fund in line with the above Vision.

The word Kalon was chosen as it represents the ideal beauty in the physical and moral sense. We feel this closely aligns with the Vision, mission and integrity of Kalon Venture Partners in dealing with all our stakeholders including; investors; entrepreneurs; business partners and other constituents in the Venture Capital community.

Our mission is to create as much non-financial as financial value, by investing smart capital, supported by smart interventions resulting in smart returns for both investors and entrepreneurs. Kalon invests growth capital to assist early stage, post revenue businesses to expand their footprint in SA, Africa and globally though our extensive networks across the globe.

Kalon is a high touch venture capital company where we don’t only assist our investee companies with financial capital but also, mentorship capital; relationship capital and human capital. Our board which comprises eight successful business leaders and entrepreneurs, with in excess of 200 years business and entrepreneurial experience, are actively involved in the investment process as well as the business building activities required by our investee companies. We assist our investee companies in raising further rounds of capital, whether locally or globally, and help build their businesses into assets of value that one day can be exited (a buy, build and flip strategy).

Kalon focuses on many verticals where digital technology is disrupting traditional industries with a focus on, Fintech including banking and insurance, Retail, Media and Communications, Health and others.

What has been some of Kalon’s deal activity highlights in the past 12 months?

Kalon has made an investment in an accounting and payroll product aimed at the SME market, called SMEasy. The company has an agreement with MTN to roll out the solution to the circa 240 million MTN customers across Africa and the Middle East. We have recently recapitalized the business to make it more than 51% black owned to take advantage of the opportunities in the education and other relevant sectors.

We have recently concluded our second investment with a company in the loyalty arena providing services to retailers and FMCG customers. The company, SnapnSave, is South Africa’s leading cash back coupon app that gives shoppers cash back on their favourite products, wherever they shop, just by snapping a photo of their till slip.

Kalon has co-invested with a South African company who are one of the leading retail technology and activation companies with a presence on five continents in more than 50 countries and provide services to over 500 000 retailers. The strategy is to launch the product into many countries across the globe.

What exciting projects can we expect from Kalon in the near future?

CB: During the last 16 months Kalon has screened in excess of 500 early stage companies and are currently in Term Sheet and /or due diligence discussions with a number of them. Our pipeline of disruptive digital technology deals is strong and we continue to attract some of the best entrepreneurial talent in South Africa and Africa. Section 12 J enables Kalon to invest up to 20% of the capital raised in non-qualifying companies, e.g. companies that are not domiciled in South Africa.

Over the course of the next month or two, we shall be announcing two to four more game changing deals both in South Africa and globally.

We are in the final stages of investing in a company with an online platform that links brands with digital content creators. The online system uses influencer marketing on its platform and offers an all-inclusive service for both influencers and brands. The company is well position to grow internationally and has shown significant traction offshore.

A further current investment opportunity, deals with a digital marketplace that enables consumers to purchase and lease solar panels to commercial scale solar energy projects in emerging economies. The company is domiciled in Delaware, in the US, and Kalon will be co-investing with a Silicon Valley based venture capital company with extensive cryptocurrency experience. The company plans to take advantage of an Initial Coin Offering (ICO) linked to the Blockchain to raise further operational funds.

Apart from the above announcements, we are opening our next capital raising round on Friday 4th August until the 30th of September 2017 where we shall be raising more capital to enable us to take advantage of our exceptional deal flow.