- Player: Dr Mehran Zarrebini
- Position: CEO
- Company: PFE International Inc.
- Turnover: R560 million
- About: PFE International Inc. is a manufacturing-orientated organisation with an emphasis on floor coverings (carpet tiles, broadloom carpet, DIY carpet tiles), polypropylene fibre and yarn, master-batches, recycled rubber flooring, artificial hair and recycled rubber crumb. Companies include Sapy, Easigrass, Van Dyck Carpets, PFE Extrusion and Mathe Group.
PFE International is a vertically-integrated group of companies that include well-known brands such as Easigrass, PFE Extrusions and Van Dyck Carpets. The business focuses on manufacturing, an industry where margins are often tight and competition is fierce and global. Yet, despite this, PFE International has shown impressive growth and currently boasts a turnover of more than R500 million. It also employs more than 500 people in the economically-challenged areas of Hammarsdale and Imlazi.
Entrepreneur spoke to company CEO Mehran Zarrebini (who holds a degree in chemical engineering, a PHD and an MBA) about the approach and mindset needed to compete effectively and grow a business in the modern environment.
Every business in its growth journey will hit certain ceilings. Can you think of any, and how you overcame them?
In business, you will always face barriers. For instance, during the life cycle of a product, sales will eventually diminish as competitors release products to market that have similar, or better, characteristics and features than yours. In the manufacturing environment that we operate in, this has the tendency to suppress growth.
Overcoming these types of strategic challenges requires a different kind of thinking. To launch products that are successful, sustainable and can out-compete other incumbents in the industry, one has to do four things.
Firstly, you need to challenge conventional wisdom. Look at alternative industries where complementary products are being utilised, and look at other industries where product innovation plays a pivotal role.
Secondly, research your customers. Understand their pain points and the buyer experience cycle fully. Most companies have an inside-out mentality instead of an outside-in mentality. Customer research is critical in reaffirming that the value drivers in the organisation are actually correct.
Thirdly, when developing a product or service, what are the factors that need to be created and improved, and what are the factors that need to be removed or eliminated. There is no point developing products that do not create value for your clients, or provide them with attributes that they do not need. These just add to cost and creates waste.
Lastly, identify a non-customer opportunity. It is not only existing customers that we must focus on but also non-customers. What can you learn from non-customers about your product? Why aren’t they buying from you? How can you turn them into customers? If you want to grow your business, you can’t just focus on existing customers. The truth is, you can often learn more from the people who aren’t buying from you.
What, do you believe, are some of the biggest barriers to growth that businesses face?
Many of the barriers to growth we often face are internal and not external. As you scale up a business, many businesses are forced to add complexity and bureaucracy. Growth, no doubt, creates complexity, but complexity can easily become something that inhibits companies reaching for or sustaining profitable growth.
It is very difficult to achieve your external goals if your issues internally stifle that growth. You need to take a critical look at the systems and processes of your company. Are they still making sense? They might have made sense at some stage, but are they still helping you to drive growth, or have they become inhibitors? How can you simplify things and make it as easy as possible for everyone to do their jobs?
Insufficient investment in people is another common problem.
It is necessary to continuously invest in human capital. Growth brings new challenges and needs for any business, so ensuring the right human capital is in place is paramount to success.
Organisations also often fail to see the merit of creating partnerships and leveraging from the successes of other organisations. The world is incredibly dynamic and organisations cannot cultivate all they need internally. Companies cannot be innovative and efficient if they do not have alliances and partnerships with other organisations. In other words, you need to deploy knowledge efficiently from one network to another.
Finally, an inability to adapt to changing market conditions is a massive barrier. As companies grow, market dynamics change and organisations are required to adapt their business models accordingly. Many companies fail in this regard as they do not continuously scan the strategic landscape. Failing to adapt and doing things as you’ve always done them is a sure way to fail.
What growth advice have you received or used in your own business?
I have received some great feedback in the past. I think the management of family-owned businesses, like mine, has different dynamics to deal with compared to non-family owned businesses.
A piece of advice that will always resonate with me is that it is imperative to focus on building organisations around resilience, and not only performance. Forgo the excess returns during the good times in order to manage the turbulent times.
One may not grow to the extent that a performance-orientated company may grow, but over the long term, I believe that a resilient organisation is far more sustainable. As a family-based organisation, we often invest with a ten-to-twenty year horizon and not necessarily for the short term. Resilience, therefore, becomes incredibly important.
Another great piece of advice that I have received regarding growth is that diversification is often crucial to long-term sustainability.
As the economy becomes more volatile and industries experience more unpredictability, it is important to diversify either organically or through acquisition.
We have to find new ways of protecting our interests so that in the event of one industry suffering a downturn, business in another sector can generate funds that allow us to invest for the future.
How does a business owner embrace a growth mind-set?
I think, in order to achieve a growth mind- set, business owners must believe that their talents can be developed through hard work, good strategies, being humble and by having the ability to listen. While these requirements seem trivial, they are often a challenge for many business leaders. Power and influence will often inhibit a business leader in developing a growth mind-set.
Continuous learning should form part of our daily business lives and we must never operate with the assumption that we are qualified for the job. There is so much to learn from working with others, especially in a diverse environment like South Africa.
If we can create and provide a collaborative and participative approach to business within the organisations that we work in, then our employees feel empowered and committed, which ultimately drives growth.
How do you stay motivated and focused on growth, even when you’ve been operating for quite a while?
I think it is important for any business to continuously challenge conventional wisdom. Having spent some time at INSEAD at the Blue Ocean Strategy Institute in Fontainebleau, I realised the importance of being able to tap into latent demand and creating organic growth by learning from non-customers.
There is a lot of insight that one can gain from non-customers, especially when trying to understand why they shun a particular product or service. A better solution to an existing problem is simply not good enough and being able to capture new demand requires focus on the demand side (non-customers). What are their key commonalities, and where can we create a leap in value?
How do you stay at the forefront of innovation in an industry where there are constant technological advancements? How do you keep your offering relevant?
Doing this successfully is dependent on the strategic choices one makes. The traditional view of strategy — to stay at the forefront of innovation — requires organisations to focus on differentiation. In a world of increasing competitiveness, with diminishing barriers to entry and increased complexity, this is no longer good enough.
The difficulty in pursuing a differentiation strategy is that over a period of time it can be easily replicated, forcing individuals and organisations to differentiate yet again.
The result is that the value/cost trade-off both move in the same direction.
End-users will only use innovative products that add some perceived value to their lives. Over and above financial benefits to the user, perceived value can be achieved either by user-centred design (where the design qualities of the technology are matched with the needs of the end-user; i.e. perceived usefulness, perceived ease of use, social pressure, etc.) or through persuasive design (where the design qualities of the technology actively encourage adoption). Understanding the market and how human behaviour influences uptake of technologies is critical to success.
- Challenge conventional wisdom. How can you do things differently?
- Research customers, competitors and non-customers.
- Create great partnerships. Don’t try to do everything on your own.
- Diversification can help you survive tough times.
- Focus on differentiation.
- It’s imperative to build organisations around resilience and not only performance.
- Resilient organisations will not always be the biggest in their industries, but they will be the most sustainable.
- Diversification is crucial to long-term sustainability. Markets and industries are volatile, so spread your risk.
- On a leadership level, talents can be developed through hard work, good strategies, having the ability to listen and by staying humble.
- Collaborative businesses that encourage participation create environments where employees feel empowered and committed. This leads to long-term employee loyalty and growth.
Pay as much attention to non-customers as customers. Why aren’t they buying from you? How can you turn them into customers?
(Slideshow) Top Advice From Local Entrepreneurs That Will Change Your Business In 2019
Here’s my collection of game-changing words of wisdom from top local entrepreneurs.
If I had to summarise my own learnings since starting CEOwise, it would be these ten points:
- I need to know the critical numbers in my business.
- The magic number is two co-founders. Teams build entities, individuals might start them, but teams build them.
- Don’t be scared of failure, that’s how we learn.
- It’s better to earn 10% of a bigger pie than 100% of a smaller one.
- Businesses in the service industry should create products out of their services, or sell value and not hours.
- Stick to your core competencies and outsource the rest.
- Make small incremental changes everyday.
- Your team is your biggest asset.
- It’s cheaper to retain clients than attain new ones.
- If you’re worrying about paying too much tax, you’re not earning enough.
After each interview, there is generally one main word of advice that sticks in my mind, and which I ponder on for days afterwards. The following advice from local entrepreneurs may stay with you too:
- Benji Coetzee, Empty Trips
- Allon Raiz, Raizcorp
- Joel Stransky, Pivotal Group
- Gideon Galloway, King Price Insurance
- Adriaan Rootman, Luxury Time
- Brian Mills, New Concept Projects
- Byron Clatterbuck, SEACOM
- John Sanei, Global speaker and trend specialist
- Ryan Kahan, CallCabinet
- Regine Le Roux, Reputation Matters
- Miles Kubheka, Vuyo’s brand
- Eben Uys, Mad Giant
- Mark van Diggelen, GameZBoost
- Erik Kruger, Mental Performance Lab
- Musa Kalenga, Public speaker
- Marnus Broodryk, SME Africa
- Rich Mulholland, Missing Link
- Mike Sharman, Retroviral
- Cairo Howarth, EFC Worldwide
- Dinesh Patel, OrderIn
- Andrew McLean, Cycle Lab
- Albé Geldenhuys, USN
- Ran Neu-Ner, The Creative Council
- Nic Haralambous, NicHarry
- Mark Sham, Suits & Sneakers
- William Wertheim Aymes, Artemis Brands
- Matt Brown, Matt Brown Media
- Pat Pillai, Lifeco Unltd
- Vuyo Tofile, EntBanc
- Ian Fuhr, Sorbet
- Colin Timmis, Xero
- Felix Martin-Aguilar, ReWare
- Fritz Pienaar, Advendurance
How Yoco Successfully Secured Capital And The Importance Of A Pitch
Yoco entered the market in 2015. In 2018, the founders raised R248 million in Series B Funding. Here’s how they’ve built a business that funders will back.
- Players: Bradley Wattrus (chief financial officer), Katlego Maphai (CEO), Carl Wazen (chief business officer) and Lungisa Matshoba (chief technology officer).
- Company: Yoco
- What they do: Yoco is an African technology company that builds tools and services to help small businesses get paid, run their businesses better and grow.
- Visit: www.yoco.com
From scrappy start-up to professional contender
Yoco launched in 2015 as a Silicon Valley-type fintech start-up (above). Today, the brand is an established business that wants to change the way SMEs are supported in the payment, funding and financial management space.
When Yoco went live with its card machines in 2015, it wasn’t just a late entry to market, it was a full nine months behind many other entries. The founders weren’t worried. They had a very specific business model and weren’t going to let a noisy market distract them from their vision.
In fact, instead of rushing, they spent the next year growing the business to 500 happy merchants. They were late to market, but getting the model right was more important than being fast.
Since late 2016, the team has closed Series A and Series B rounds of funding, totalling close to R300 million. Slow and steady has worked. That doesn’t mean raising capital was easy, just ultimately successful. Here’s how Yoco did it.
Starting with Angels
“In a strange way, we were lucky that we didn’t receive venture capital funds early on,” says Katlego Maphai, founder and CEO. “We had a funder pull out at the last minute, which was scary, but also a blessing in disguise. It meant we had only angel investors and family offices invested in the business, which gave us the capacity to think long term and not take shortcuts. We’ve since realised the importance of only taking on VC investment at the last possible moment. It’s imperative to have product/market fit before you chat to VCs, and we only really achieved that at the end of 2016.”
The team learnt this lesson in hindsight though, and like so many start-ups, did approach VCs too early. “We tried to raise VC in early 2015 when we started our beta programme,” recalls Katlego.
“In our minds, we’d been running the company for two years. We thought we had two years’ worth of traction. When we started talking to investors though, the conversations didn’t go as expected. As far as they were concerned, we’d only been operating for two months, and the valuation we were asking for just didn’t make sense.”
Two years later, Yoco was in a completely different position. “From the beginning, we recognised that although tech is important, our business model would differentiate us. We needed to be fast, cheap, use digital channels to onboard clients and aggregate our merchants so that our banking partner has only one point of contact — us. This was what we were quietly investing into, removing friction for merchants who were onboarding themselves onto our platform.
“This was our big focus — to make the entire process as simple, efficient and low cost as possible. Merchants need to be able to onboard themselves, with no hand-holding. The problem in this market has always been one of distribution. How do you get to market in the cheapest, most efficient way possible, when the traditional people-intensive distribution model doesn’t work because it’s just not economically viable? Once we achieved that, the ability to manage merchants at scale became a reality, and that’s when we were ready for VC funds.”
In reality, Yoco only achieved product market fit and growth at the end of 2016. “By then, we’d grown ten times our size over the space of 12 months to 5 000 merchants, we had traction, incredible unit economics, and we’d built up infrastructure that allowed us to be efficient. We could really concentrate on growth. In particular, we weren’t worried about anything breaking or the system toppling over.”
It’s an important point for any start-up to consider. Often, the unit economics of businesses experiencing growth are out of kilter, as the business’s efficiencies struggle with the increased pressures of growth. By the end of 2016, Yoco was growing while remaining efficient, which was a big advantage when they started approaching investors again.
Teams and ecosystems
In the two years preceding Yoco’s official launch, the founding team, Katlego Maphai, Carl Wazen, Bradley Wattrus and Lungisa Matshoba, didn’t just research the technology to make card payments possible for merchants in the informal, rural and SME sectors, but were working on a business model that could achieve their business vision at scale.
“We were a multi-disciplinary team that had come together wanting to make a real entrepreneurial play,” says Katlego, who brought the team together. Having grown up with Lungisa, Katlego met Carl while working for a telecoms advisory and investment firm in Dubai, and Bradley at an incubator for online businesses in Cape Town that hired ex-management consultants to assist start-ups.
By 2012, all four partners were living in Cape Town and had savings they could live off while they planned their entrepreneurial play. “We kept coming back to the payment space. I’d seen Square, a mobile point of sale system, in action in San Francisco in early 2011, and experienced a small restaurant business that would have been cash-based accepting cards. We knew how under-serviced SMEs were in South Africa, and that card payments presented opportunities to support them. We also knew we could build a suite of services to help our micro and SME clients run and grow their businesses once they were on our platform.”
The team didn’t focus on the tech — it existed elsewhere and could be outsourced. Instead, they focused on their business model. “We focused on why banks hadn’t traditionally serviced this sector,” explains Katlego. “Our business model needed to address those challenges and the pain points of our target market, and it needed to do so in a way that allowed the business to scale efficiently and cost-effectively.”
Yoco’s team came from the mobile space. “You walk into a mobile store, fill in forms, have a credit check, get approved, sign the agreement, receive your phone and sim card and walk out the store. You’re now a customer, and hopefully you grow in value and don’t leave the network. That’s what we wanted to do for the card payment space. We wanted to take a process that takes weeks and strip it down to minutes by applying mobile thinking and using ecommerce as a channel.”
Until that point, merchants would source card payment tech from providers, but sign the bank’s merchant agreement, and this was where many small and micro merchants struggled to access services: Banks were just not set up to validate small businesses. It wasn’t economically viable, mainly because it tended to be a high-touch process. It was also a lengthy process.
“We knew that for us to reach smaller businesses, we needed to be able to sign up, vet and onboard applicants digitally, limiting people in the process, as this adds time and costs. This was probably our single most important insight. Once we understood this, we knew we needed to aggregate merchants, so that the partner bank we signed with would treat us like a ‘super-merchant’ — they manage the risk with us, vet us, take us through a rigorous process, and then allow us to aggregate sub-merchants under our umbrella.”
There was just one catch — for any of this to work, Yoco needed a partner bank that would agree to them aggregating merchants. “We moved to Joburg, moved back in with our parents and spent a year lobbying our partner bank,” says Katlego.
Consider what that took — ex-management consultants who had been earning impressive salaries had to return to their childhood homes so that they could focus on building their business and securing the trust of a partner bank.
“Our backgrounds had taught us how to gather information, package it and present it in such a way that we could build credibility quickly and effectively,” says Katlego. “We also knew what we didn’t know, which in this case was the payments space.”
To fill that gap, the team built an advisory board and approached the ex-head of Visa Sub-Saharan Africa to join their board for an equity stake in the business. “LinkedIn gives anyone access to the experts in every field, and networking plays a part as well. We were asking the right questions, and ended up with a few introductions to the same person.
“From there, you just need a strong value proposition. This was a vital component for us. Not only did he coach and advise us on the payments space, but he had a strong network, and it helped convince the banks that if we could convince him that we knew what we were talking about, we were worth meeting. The same was true of funders. You need a strong team, and that includes domain expertise, which at the time we didn’t have.”
There was a challenge though: In order for Yoco to secure a licence from a partner bank, they needed to show they were capitalised, but to secure funding, they needed a licence from a partner bank, as this was core to their business model.
“It was a bit of a conundrum,” says Katlego. “We solved it by approaching investors and getting firm commitments based on the licence. With that, we could secure the agreement with our partner bank, which in turn enabled us to trigger the draw-downs with our investors.”
The entire process taught the team how to de-risk the business at every stage of the journey. “We learnt to always think in milestones, and each milestone increases the value of the business. For example, securing the licence was a stage of value. By the end of 2014 we had moved back to Cape Town and were certified by Visa and Mastercard. We launched our first early beta with 20 merchants. The next milestone was our first transaction.
Related: Is Venture Capital Right For You?
The fact that Yoco’s founding team had four members with varied and successful backgrounds dramatically increased the business’s chances of securing funding, but they still needed to learn some lessons.
“In mid-2016 we went on our Series A road show, and it was a choppy start. First, we realised that we were thinking globally, and those were the conversations we were having, which didn’t match up with the conversations local VCs were having with us. You need to all be on the same page, and we weren’t.”
Once the team realised this key point, they started looking at international investors, but things still weren’t going smoothly.
“We started recognising that part of the problem was the way we were approaching the whole funding process,” says Katlego. “We’d just had an investor meeting that didn’t go well, and we weren’t feeling good. We knew we needed funding — our runway was almost out and our current funding model wasn’t sustainable.
“Instead of focusing on investors, we looked at ourselves. What were our objectives? What were we looking for? We ended up with six key objectives.”
- Completing an investment round that gives us at least 12 to 18 months runway
- Working with an investment partner who has experience growing a fintech business
- Working with an investment partner that backs the team, and understands that one of our core strengths is our ability to operate autonomously
- Taking on investors who have respect for our existing stakeholders, who had walked a long path with us when very few believed in what we were doing
- Arriving at a fair deal, with terms negotiated in the right spirit
- Having the Yoco founder group, organisation, and stakeholders coming out feeling energised and ready for the next phase after the round. The wrong terms and conditions can have the opposite effect, crippling our sense of self-belief and achievements to date. Something not to be trivialised for an organisation that is looking to win.
It was a powerful exercise. From that moment onwards, the team walked into meetings knowing what they wanted, which in many ways levelled the playing field. “We had more confidence and we asked more questions, which lead to richer discussions with potential investors. We could also walk away if we saw a key objective wouldn’t be met, which saved everyone time.”
Through this process, Yoco secured Series A funding from Velocity Capital in the Netherlands and US-based Quona Capital for $3 million in new capital and a further $1 million in secondary buyouts, allowing some early angel investors to exit.
Since launch, Yoco was run based on formal governance and structures, which also played a big role in securing investment. “When a business is run pristinely and the due diligence is based on well-organised numbers and data, investors have comfort that their money will be managed properly. Our advice is to run your business clean from day zero. Keep good books and don’t put any other expenses through the business. We learnt this lesson from a real estate developer who told us to always be ready for the exit. She didn’t mean selling the business, but rather that if someone took a look, within moments you could produce whatever they want to see. I can’t stress enough how this has helped us.”
Understanding your pitch
Yoco raised $16 million in its Series B fund, which closed in 2018, and although it was the same process, the focus of the pitch was very different. “Series A is often about survival. Series B is about how big this thing can become.
“During our Series A roadshow, a big part of our pitch was proving that there’s a market for people who want to accept cards, and that there was a new way to reach this market that is not people intensive.
“In the Series B round, we could show that we’d been able to grow our base to three times its size with continued good economics and a healthy, good payback. We also showed that the market is ready to be taken with the right type of capital.
“The message was simple: We’ve figured it out and we think we can win with additional capital. There’s a huge opportunity to build an entire SME operating system, bringing payments, software and capital into one home that can essentially look after a small business and build an ecosystem around them. This in turn allows third parties access to our distribution network.
“There’s an overarching need that we’re plugging into. SMEs lack access to tools, capital and payment acceptance. It’s a big gap that we want to solve, and we’re open to partnering with anyone who wants to help solve it. It’s an open commerce ecosystem.
“Our next step of growth was to democratise access to software, because software is where the magic happens. Our app allows small businesses to manage their business finances through what is essentially a mini ERP for micro enterprises and SMEs. We are making a deep investment into building this out, because we believe it’s where the stickiness and value of our product lies.
“Customers came to us for a card reader, but they’ll stay for a much wider service offering, including access to capital and a platform that they can run their businesses from. Up until this point Yoco has signed up innovators and early adopters. Now we’re taking the brand to the mass market.”
Danie Venter Saw A Gap In The Informal Segment And Grew Within Just A Few Months
Stoffelberg Biltong is a FMCG start-up that attracted the interest of Secha Capital. Here’s why.
In 2014, Danie Venter lost his business. He owned a Spar supermarket, but the business wasn’t doing well, and he knew his only option was to sell it back to the franchisor. While his wife, Nikki, continued to run the store as the sale was finalised, Danie turned his attention to something else: Sourcing and selling fresh chickens to the informal segment in Mamelodi and surrounds.
“I needed to find a way to pay the bills, and I recognised how under-serviced the informal sector was,” he explains. “Only frozen chickens were available to a community that didn’t have microwaves to defrost them. I knew there would be a market for fresh chickens.”
Danie was right. Within a few months the business had grown so big he was supplying chickens to other retailers in the area, and he approached Oom Stoffel, the owner of JC’s Meat Traders, to expand his product offering.
Over the next 18 months a friendship developed, which led to inevitable discussions around an industry they both knew well, and eventually settled on the idea of packaged biltong.
“It’s a fragmented market and none of us could think of a single brand of packaged biltong that we loved. Instead, we had local butcheries or suppliers that we bought from. We recognised there was a gap for a quality packaged biltong brand, and started working on it.”
From planning and designing the product and packaging to market took three months. Before the business launched though, Danie’s life changed forever. He was declared legally blind as a result of a condition called Optic Neuritis, and approached his business partner to say he could no longer participate in the venture.
“Oom Stoffel refused to accept the fact that I couldn’t participate in the business. His area of expertise was the product — the abattoir and ingredients — but mine was the trading side of the business. Together we could really make this brand work, and he didn’t believe my eyesight (or lack thereof) would get in our way.”
Oom Stoffel was right. Danie’s wife reads him his emails at night, but most of his business is done the old-fashioned way — over the phone or in person. Despite challenges, Stoffelberg Biltong launched and soon started securing a footprint.
Leading a market
The business has a number of verticals and strategies to ensure cash flow and build cash reserves, but the primary vision and mission is a market-leading packaged biltong brand.
For example, Stoffelberg supplies other biltong outlets. While this may seem like Danie and Oom Stoffel are supplying their competitors, the reality is that in many respects, biltong is price sensitive and most retail stores will change suppliers from week to week. This results in a level of inconsistency when it comes to quality, the exact opposite of what Stoffelberg stands for through its branded products.
“We’re consistent, while most of our competitors are not. It’s a big, fragmented market. The current market leader only holds 6% of the market. We believe it’s important to build our brand, but we’re comfortable supplying others at the same time. It adds to our revenue stream, and more importantly, our positive cash flow.”
Going forward, the team at Stoffelberg also plans to open retail outlets and already has a kiosk. The company is also investing in continuous research and development.
“When everyone is offering the same products, you need to differentiate yourself. We want to think outside the normal verticals. When you own the entire value chain you can be innovative. If we want to try something, like chilli packets in biltong bags for example, we can do it and get immediate feedback. We’ve also launched a natural range with no preservatives or sugar for consumers with allergies, diabetes, or who just want a more natural product.”
Stoffelberg is a premium product, from its packaging to the product itself, but because of the vertical integration and the fact that the business holds the entire value chain, the brand remains competitively priced.
“Our goal is to reinvigorate a fragmented market,” says Danie. “That takes focus, brand building, a premium product and constant research and development.” It’s also taken an investment equity partner in the form of Secha Capital.
Within a year of launching, Danie received a call from Brendan Mullen from Secha Capital. “We weren’t too keen to discuss investments at that stage, primarily because we didn’t want to give away equity in the business,” says Danie. “We were supplying some Spar stores and we’d already begun chatting to Shoprite Checkers.
Brendan continued to reach out and we realised that if we wanted to grow the business, there could be value in accessing capital to fund the growth we were experiencing.”
The initial meeting with Brendan revealed that although both Oom Stoffel and Danie are subject matter experts, there was a clear marketing gap that Secha Capital could help fill. In addition, as an FMCG and Agri-focused funder, Brendan and his partner, Rushil Vallabh, came with a network and connections that would be beneficial to the business as well.
“We had one of three game-certified abattoirs in the country, and we were Halaal, HACCP and export certified, but we needed to invest in a drying room and other facilities necessary for large-scale biltong production. Once we understood our needs and the value Brendan and his team could bring to the business from a growth perspective, the deal made sense. Giving away equity if it results in growth is worth it. But you need to make sure you’re selling to the right partners who add value beyond a capital contribution. It’s not just about the money.”
“Look for opportunities in fragmented value chains, where there are no clear brands in that specific section of the market. Find that, and you can find a slice of that value.”
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