Silvertree Internet Holdings has invested over R20m in existing and new consumer-focused technology companies in the first seven months of 2015, and has seen month-on-month revenue growth of over 10% across the portfolio in 2015, and as much as 40% monthly for some ventures.
Silvertree investments included over R16m of first-time investments in three deals in the e-commerce, online travel and IT development industries respectively, and around R4m of follow-up investments into current portfolio ventures.
Silvertree Internet Holdings, the holding vehicle of early-stage investor Silvertree Capital, is strongly focused on operational and marketing execution within portfolio companies. By making large and active investments that include cash and operational support, the Silvertree team is able to help grow and find opportunities for cooperation between businesses. Silvertree business operate in South Africa, Nigeria and Kenya.
For the trio behind Silvertree, Peter Allerstorfer, Paul Cook and Manuel Koser, the biggest opportunities for tech investment in Africa are in working with businesses driven by strong teams that are executing simple, proven models. A continuous focus on revenue and margins has allowed the group’s operations to reach breakeven, despite 10%+ monthly revenue growth rates. Manuel Koser said, “We watch the numbers every day every hour, checking progress, making adjustments. It’s all about execute, execute, execute!”
Silicon Valley-style entrepreneurship is growing rapidly across Africa, as seen by the exploding numbers of incubators, hubs and co-working spaces across the continent. Despite this, there are still relatively few real success stories of startups that grow large enough to substantially impact the continent’s economy, and many startups complain that securing real investment capital is extremely hard.
According to Paul Cook, “We in Africa can be too quick to try to copy the surface activities of Silicon Valley, with its focus on ‘cool’ ideas and disruptive innovation, and sometimes forget that building a viable business requires finding customers and generating revenue. Smart potential investors are seeking businesses that have proven they will be able to make money – not just great ideas.”
Looking forward, Silvertree will continue to mix internal business building with further investments in a small number of top-tier early and mid stage businesses. Peter Allerstorfer said, “We are always interested in new opportunities, but only where we believe in the business and are able to create more value through our involvement than just the value of a cash investment.”