South Africa’s Getihu has launched its Software as a Service (SaaS) investment fund in Cape Town and made its first two investments, one of which is in South African human resources startup Hi5.
Founded by Thomas Schmider and Ryan Paterson, Getihu has launched innovation hubs in Cape Town and Lyon designed at creating a bridge between Africa and Europe for SaaS startups in the B2B space.
It invests in scalable, B2B software applications, and takes a minimum stake of 25 per cent in return for investments of between US$25,000 and US$500,000. It plans to be operationally and strategically involved with its portfolio companies, acting as an accelerator.
“Our investment model is early-stage. We are not saying a company is valued at X million. We are looking at what needs to be done in a 24-month period to get local traction and international traction,” Paterson told Disrupt Africa.
Schmider said the pair did not consider themselves to be business angels.
“We are still entrepreneurs, and we partner with them to provide the necessary finance for the first 24 months. We are not a traditional fund, it is about bringing the company to a stage where a traditional firm can invest on a proper valuation,” he said.
Getihu has focused on SaaS as it believes it is a quickly developing space, with plenty of B2B problems to be solved.
“It has got to be the right company, not just for the sake of it,” Paterson said. “We would do well to invest in one, maximum two, per year, just from a time perspective.”
The fund launches having already made its first two investments, putting undisclosed amounts into the France-based SaaS-enabled marketplace DOZ and South Africa’s Hi5.
Hi5 is allows companies to better manage their human resources (HR) processes via a simple app that allows employees to update their own information. By registering for Hi5, adding co-workers and sending invitations, HR staff can sit back and allow employees to populate their own data. The aim is to cut down on administration and meetings so managers can focus on qualitative staff engagement.
“They have a mature founder who has had his own company before. They have started to get some traction already, and already have access to blue chip clients,” Paterson said.
Key to Getihu’s strategy are the innovation hubs in Africa and Europe, which will host portfolio companies but also other strategically chosen firms.
“We are looking to build a talent pool that is going to serve our portfolio companies and the ecosystem as a whole. We are not running the space so we can make rental income, though we obviously want it to pay for itself. We are based there, and we will put our portfolio companies there where it makes sense,” said Paterson.
Schmider said the fact Getihu also had a hub in Lyon meant it could assist African startups when it comes to launching in Europe.
“We offer African startups an international dimension. We will use our presence on the two continents to offer that exposure,” he said.
