CAPE TOWN – Kagiso Capital, the investment holding company that was established in 2014 to transform society through meaningful investments, has announced a R100m investment into Stellenbosch-based Alphawave Group, a specialised technology investment group.
Earlier this year, Alphawave Group announced a significant investment from US-based Five Elms Capital into one of their subsidiaries, Skynamo – one of the largest investments in recent years within the South African venture capital context.
The R100m investment sees Kagiso Capital pursue a relatively new theme in advanced technologies by selecting the established Group focused on the Internet of Everything (IOE).
Alphawave Group’s 12 businesses traverse technologies from sensor technology, electronics, software development for virtual and augmented reality, machine learning and artificial intelligence. It has profound expertise, proven over the last 25 years to support and build successful commercial technology companies.
Frans Meyer, chief executive of Alphawave Group, says: “This investment demonstrates the success we have had in developing valuable technology businesses – our track record, our exits, but mostly our careful eye in attracting and growing the best engineering talent in South Africa. Before Lockdown, we had multiple investment companies talking to us but we were not actively looking for funding.
“We generate cash from established businesses in our portfolio to invest in new ventures. This is how we started Skynamo and Inrange - our latest technology ventures now expanding rapidly on the international stage. Capital of this kind can, however, accelerate the current businesses.
“It allows us to attract top talent more aggressively, finding technical people with sound engineering ethos and unique, internationally competitive skills in the Internet of Everything domains we specialise in. Furthermore, the capital allows us to accelerate building our Group, as opposed to us growing organically. The restriction of bootstrapping potential new businesses has been released."
Kgotso Schoeman, chief executive of Kagiso Capital, explains: “Alphawave is a South African firm creating global solutions to solve complex problems and puzzles. So often this depth of thinking or execution comes from the West, but through Alphawave we can demonstrate that South Africans can develop solutions for the world.
We want to be clear that this was not a BEE deal, it is a strategic investment decision. We want to rapidly impact innovation in this country and we think Kagiso's interest and contribution on strategy, together with Alphawave’s experience and skills, could have profound effects, drawing talent from the broader demographics of our country into internationally competitive science and engineering firms.
“They will maintain their independence and team culture while we get to be partners in developing South African ideas that can be taken to a global market.”
Lebogang Mosiane, Kagiso Capital's chief operations officer, added: “All too often, venture capital has no sense of ‘proudly South African’. Our interest is about a clear end game; a long journey to establish something of real value – local innovation, with local talent, that we export out and can claim as ours.
This is not just the typical risk-return transaction, it’s about pride in what South Africans can accomplish in a culturally diverse society. That's what this meeting of minds offers. You wouldn’t typically put us together, a 25-year-old Stellenbosch based technology company with a black investment capital firm, but it makes so much sense.
“This is how we should be approaching business in South Africa - where we can complement each other.”
The commitment from both parties is best illustrated by the fact that the deal was closed on March 30th, a few days after Lockdown Level 5 was implemented in South Africa. Alphawave Group’s 140 engineers and computer scientists integrate a depth of problem-solving across a wealth of IOE themes and capabilities with two decades of experience, strategically incubating internationally scalable businesess for growth and profitability.
Other companies in the Alphawave Group include EMSS Antennas, Inrange, FieldSENSE, FarmRanger, Saigen, Callbi, Predictive Insights and Sozo Labs.
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