JOHANNESBURG - Some ‘interesting’ comments have been levelled at Sagarmatha Technologies, post our announcement that we plan to list the company on the Johannesburg Stock Exchange. Before I unpack what Sagarmatha is and will do, so everyone can be on the same page, let me address the less salubrious remarks that have percolated certain quarters last week.
This is not about a company that is in financial trouble needing to settle a loan. Let’s make that very clear. It’s about a future where eCommerce is driving the digital economy across Africa, supported by the broad reach of a media organisation that has deep penetration through traditional print, has a steadily growing digital audience, a logistics base and the shared vision of a management team to build, and deliver, a fully-fledged Multi-Sided-Platform (MSP). It’s about raising investment to scale businesses.
So, stop silo thinking.
Yes, there is debt in Independent Media. We’ve disclosed that in the pre-listing statement – not that it was a secret in any event. So, accusing us of just raising money to clear debt is in my opinion, narrow minded and underscores just why Sagarmatha needed to go offshore to get a valuation of this complex business model in the first place – the expertise for valuing Multi-Sided-Platforms resides in markets that are already receptive to and understand the model…from practice (54 percent of MSPs originate in the USA). MSPs are novel in Africa, so we understand analyst hesitation in this regard, but not necessarily the blinkered approach – for elucidation, perhaps refer to the likes of https://www.cnbc.com/2016/08/23/cash-burn-companies-not-always-bad-investments-professor-says.html, or even Duncan McCleod’s article in the Sunday Times this weekend, regarding the high value of tech companies – in the long term.
For the purposes of clarification, we have a shared vision – Loot.co.za and Independent Media and all the other companies in the group . It’s not just one person’s dream to make this happen. There is a host of dedicated individuals at all levels of the business, who have tirelessly worked to bring this shared vision to fruition. To suggest then, that so many intelligent people can be so easily duped….really? Are you saying then that those of us who have chosen to align our businesses in Sagarmatha, along with the JSE, local and international investors and local financiers, are all unable to read and interpret the documentation that was needed to form the pre-listing-statement? That they do not have a vision for Africa or how Africa and Africans can benefit from this kind of business approach? Is Sagarmatha being ‘attacked’ for being honest?
But enough of that. Sagarmatha Technologies is the fruition of a vision that has been a long time in the making. It’s one I am personally, very proud of. So, what is it and what will it do and why are investors really keen on getting involved?
To use a local and practical example, when Naspers invested in Tencent Holdings – to the tune of USD32 million – I wonder if they looked at the today or at the future, and whether they knew it would be one of the biggest gaming and social media companies in the world? Did they foresee that the mobile game ‘Honour of Kings’ for example, would generate the types of revenue, shareholders and investors can only dream of? One would hope, they invested because they hedged a bet that there was potential. Sagarmatha has no less potential.
Look at Takealot too. It required Billions of Rands in funding to scale and attracted the investment it needed to grow. Sagarmatha is no different.
Sagarmatha has seen the same scope for growth across Africa just as Tencent did in China. Even Jack Ma, founder of Alibaba is eyeing Africa as an opportunity. But, heaven forbid that an African company sees the same…Let’s just sit back and let global companies launch their MSPs into our African territories. Would it not be better for when they do come, to rather be in a position to have some interesting conversations?
Sagarmatha has an audience and knows how to monetise it. In addition to the obvious businesses like our branded media (think the print titles and digital properties), our eCommerce platform and our syndication business (in 40 countries across Africa), and our logistics capabilities, we have a model that already generates rich data sets.
We also have the ability to interpret the information that we amass on a daily basis, to better serve all our customers in the ecosystem – be they consumers or businesses. With existing proprietary technology and planned acquisitions, we see this aspect of the business being even stronger and providing a critical differentiation in the future.
We know that Africa still faces incredible challenges to roll out digital across the continent and therefore eCommerce and mCommerce are still nascent, although mobile is accelerating beyond even the most optimistic expectations and is undoubtedly the panacea. Again, to draw a parallel with China, around 80 percent of all sales on Alibaba are on mobile – we don’t expect anything different here in Africa.
We are not expecting continental connectivity to happen overnight, but we are prepared for when it happens and even prepared to help it reach the goal of engaging and transacting with the billion and more. That’s why we have the strategic partners we do.
We are an African company that understands Africa. That is a crucial distinction.
Our audiences are key to our strategy and future growth. Sagarmatha is inclusive and resonates with a much broader demographic across all socio-economic measures. Having the right offerings is one thing but, unlocking the settlement of these prospective transactions is another. Currently, Loot has 13 payment options in South Africa alone but, our wider eCommerce and mCommerce ventures are gearing up to embrace a host of other alternative settlements across the rest of Africa.
What everyone is missing here is that eCommerce behaves in a very different manner to any traditional business. It is not bound by the same rules and precepts. eCommerce has audience groups that also think outside of the traditional realms.
What we plan to build here is not a replication of what already exists in the eCommerce space. Sagarmatha Technologies will launch and acquire B2C verticals and build B2B marketplaces using our partner network technology and combined know-how.
Finally, let me reiterate, Sagarmatha Technologies sees this as a long-term play and has the resilience to unlock the value on our continent.
We do not fear what people say about us today, and we do not fear the unknowns of tomorrow, because we are fully prepared to realise the potential that we all know exists in Africa, from today.
Hadfield is an eCommerce veteran with more than 15 years’ experience. After serving at executive levels at Kalahari from 2000 to 2010, the latter as chief executive from 2005 to 2010, he took over the reins as chief executive at Loot in 2011. In 2015, Loot was on the lookout for a strategic partner and selected Independent Media as the best fit for its business growth.
- BUSINESS REPORT ONLINE