Venture capitalist's R400m adventure to dent SA unemployment
DURBAN - Venture capitalist Gavin Reardon is on an investment drive to raise R400 million to benefit emerging, black-owned small and medium enterprises as an effort to dent the scourge of unemployment in South Africa.
Reardon, 34, from Durban, is founder and managing partner at Kingson Capital, which was established in 2015.
The chartered accountant says the firm invests in businesses across financial services including fintech, healthtec and insuretech, and are also looking at investing in the lucrative energy sector.
“We are looking into making investments in SMEs because it is critical to develop such businesses,” says Reardon, former group financial manager at real estate developer J.T. Ross.
“We firmly believe that to solve the unemployment issue that we have in the country, we have to focus on SMEs. In fact everyone recognises that SMEs are vital in reigniting the economy.”
He forecasts that fintech will continue go grow at a rapid pace in 2019 and stresses that the flexibility and adaptability of tech across various markets will be important.
Data, he says, is going to continue to be at the crossroads of all decisions for early stage investors. “Startups that have the ability to take to market data-driven solutions and execute the smartest, will be some of the early big winners.”
The businessman says there are plenty of opportunities for startups in the healthcare industry as it catches up with technology, and he believes that startups could help bridge the divide.
Reardon says there will be growth in the insuretech space and lifestyle tech solutions that are more consumer-centric.
“This year promises to be an exciting one. We’ll be investing and doing our bit to help scale startups across South Africa.”
He says the R400m target fund would be invested primarily in fintech, Internet of Things, insuretech, among other startups as they are growing markets that could secure the country’s competitiveness on the global stage.
“That will be invested in 30 to 50 businesses across our mandate,” says Reardon, who embarked on a business trip to the US capital of Washington D.C. in December.
He says the plan is to invest in startups in South Africa before slowing spreading out to other parts of the continent.
“Africa for us is very key. We are looking to partner with people across Africa. We are already doing some work in Zimbabwe and Botswana.”
Reardon, however, says the end goal is to tap into the global startup ecosystem. Which explains the trip to the US.
“We want to tap into the US market as well. We want to build bridges between the US and South Africa. But it is not our intention to go set up shop there at this point in time.”
The driven entrepreneur says he met some stakeholders during the US trip who were looking to investing in the continent, adding: “There is a growing appetite for investors to invest in Africa.”
He commends President Cyril Ramaphosa’s concerted investment drive to raise $100 billion in investment for the country.
“I was at the Investment Summit last year. The language and momentum around investing in SMEs was quite important. We are positioned well to see investments taking place,” says Reardon.
He stresses that what is important for them as a company is to build up the venture capital ecosystem in South Africa.
“We’ve seen the introduction of a few corporate venture arms recently in South Africa, and I expect this to continue to grow as venture capital becomes more mainstream among corporate South Africa.”
Reardon says the startup ecosystem is not built on one subset of stakeholder, adding: “From startups to accelerators, angels and venture capitals, corporate and institutional investors, each has its role to play in scaling the startup ecosystem.”
“I foresee greater collaboration this year, across the board, and an increasing number of syndicated co-investors to support the scaling of startups.”
- BUSINESS REPORT ONLINE