Plus: Smart rings, surveillance tech, 7 funded startups & getting competitive.

Newsletter

April 25, 2023

Hi there,

Thinking of popping the question? Forget diamonds, heartbeats are where it's at according to Czech company The Touch which makes wearable rings that let you get all cutesy by sensing your partner’s heartbeat anytime anywhere.

Not bad considering the international “smart rings” market is supposed to grow by 20%-plus this year.

In this Open Letter:

s’Obvious: Want to address a need? This is SA’s biggest…
SARS’s R160bn short, the tech Cape Town’s buying & overworked Elon.
Big deals: 7 Startups with A series cash.
Keep hustlin’: Standing out in a competitive space.

TRENDING NOW

Solving SA’s biggest problem

One step at a time

By now, most South Africans know that unemployment is really high. But with so many things happening, have we grown cold to the magnitude of this problem? Entrepreneurs are known to solve problems and what better place to dig for problems to solve than where the biggest problems exist?

A rising search trend

Internet search data reveals that among the top rising searches in South Africa are the latest football scores, betting websites and then notably, searches for “sassa”, “sassa status” and “srd”. Sassa, or the South African Social Security Agency, is the agency responsible for distributing grants to qualifying citizens.

Pre-covid days, this was reserved for parents or caregivers of children, the elderly and the disabled. But come Covid, the government introduced the Social Relief of Distress Grant (SRD) disbursing R2.7 billion a month to some 7.8 million people.

But what about interest in jobs?

Analysing the searches for “jobs” yielded far fewer results affirming the narrative that some have simply given up looking for jobs.

But the sentiment is not the same across provinces. Most notably, Western Cape ranks last in searches for grants and shares the top spot for searches for jobs.

The big plays aren’t working, perhaps we should go for smaller ones

Now unless one has an influence on the macro environment (i.e. you are an elected politician), smaller more practical steps can make play a key part in restoring lost hope. Here are some creators and startups making an impact in this space

LinkedIn creator, Katlego Mosetlha managed to gain 258 800 followers by sharing tips on finding jobs, writing CVs and posting job opportunities. Converting a small amount of that audience into paying customers (or even generating placement fees) should be a really good business.
Educ’ish is a non-profit organisation encouraging South Africans to consider entrepreneurship as an employment option. They provide content, workbooks and stories for any entrepreneur. If you are side-hustling or pondering doing your own thing, check them out.
After starting out as a gig-economy platform for students in Stellenbosch, JOBJACK pivoted to a massive market…helping large organisations hire blue-collar workers more efficiently. And with customers such as Steers and Pep, they are making the process of finding, applying and getting jobs easy. In fact, 760 people found jobs successfully on their platform in March. Now that’s putting food on the table.

Unfortunately, unemployment will not go away overnight, but with such a large problem at hand, opportunities abound. Hustlers, you know what to do…

Doing something in this space? Let us know by hitting reply….

IN SHORT

⚡️ No power, no tax: SARS commissioner Edward Kieswetter says SARS could lose R160 billion this year due to loadshedding. The tax on 6,400GWh of unserved energy alone is a loss of R140 billion, the shortfall a guestimate of companies that might have closed down or lost on operations.

🚔 Mother of safety: The City of Cape Town had quadrupled its crime-fighting tech budget for 2023-2024 to R860 million. In a bid to curb rising crime rates and keep its reputation as SA’s It holiday destination, it’ll invest in everything from surveillance, cameras to drones.

👀 Tech rules: After the ANC turned down all his ideas, the president’s former 4IR advisor started a new political party, Arise South Africa, ahead of the 2024 elections to advance tech in SA politics. Hmm, one to keep an eye on?

📱New batteries: Huawei SA has announced a new battery-replacement programme, where they’ll replace the battery on any Huawei device for just R150. Presumably, it’s to get you to use their genuine batteries, but you can’t baulk at an 82% discount (usual cost is over R880+).

🚀 Trouble in Teslaverse: Despite the explosive success of SpaceX’s Starship launch (apparently that fireball was a good thing), Tesla shareholders have complained to the board that Elon Musk seems too distracted to run Tesla properly. (Tough holding down 3 full-time CEO jobs: Twitter, SpaceX, Tesla, while part-timing at The Boring Company and Neuralink.)

WATCH THIS SPACE

Slower money

Bigger deals

Funding into tech startups in Africa slowed down by 57.2% during Q1 2023 compared to the same period a year ago. It’s not surprising given the global slowdown of VC funds flowing is also down 53% year-on-year. Whilst seed funding has slowed down substantially, it was nice to see some big series A rounds come through.

Here are some of the SA startups that managed to raise in Q1:

Lulalend – R630 million – Fintech/Credit

Lulalend, a South African fintech founded in 2014, provides innovative funding solutions for SMEs using proprietary AI technology to bridge the small business funding gap in South Africa.

Naked – R306 million – Insurance

Naked Insurance is a comprehensive insurance company praised for its use of technology to provide an efficient claims process and responsive customer support.

Carry1st – R485 million – Gaming

Carry1st is Africa's leading publisher of mobile games and digital content, operating at the intersection of games, fintech, and web3. The company focuses on scaling awesome content in frontier markets by solving hard problems and developing, licensing, and publishing games, which are then monetized effectively with their proprietary platform.

Sendmarc - R128 million - CyberSecurity

Sendmarc was founded in 2020 by Sam Hutchinson, Keith Thompson, and Sacha Matulovich, with its headquarters in Johannesburg. They provide email protection services to help businesses secure their email communications and defend against threats like phishing attacks and business email compromises.

Yebo Fresh – R78 million – E-commerce/Logistics

Yebo Fresh is an award-winning eCommerce platform based in Cape Town, South Africa, on a mission to make easy and affordable online shopping accessible to all South Africans, including those in the townships.

Flow – R81 million – Proptech

Flow utilizes the power of major social platforms such as Facebook, Instagram, and LinkedIn to match people with suitable properties. As a part of the broader proptech industry, Flow is among the innovative tech tools aimed at optimizing the way people buy, sell, research, market, and manage properties.

Envisionit Deep AI – R30 million – MedTech

Established in 2019, Envisionit Deep AI is an innovative medical technology company using Artificial Intelligence to transform medical imaging diagnosis.

THE BUILDER’S CORNER

How discouraged should you be by competitors?

What if, a few months in, you discover someone else was building almost the exact same idea for the same market? Or, you have a super cool idea, but it’s a very competitive market? Is that the signal to give in, pivot or not start at all? Not always…

See, you always need competitors in business – look at Microsoft and Apple, they looked practically identical on paper when they were founded in ‘75/’76. And today? Worlds apart, and no one would insist on having just one or the other. We want, and need, both!

Closer to home, no one would have ever doubted the absolute dominance of SA’s Big Four banks, until Capitec came along and smashed it out of the park, claiming 1 in 3 South Africans’ business in the process.

So how do you build competitively?

Make market analysis key in your concept validation – Before you build, make a list of your competitors, how many customers they have, how much funding they raised, their market and value proposition – every bit of info you can. Do it like Sabri Suby does his Halo market research in his book Sell Like Crazy.

Get your competitive advantage – Now ask yourself: What are they NOT doing or what can I do better/differently? If you actually check what people say in their Google ratings and comments on a competitor’s socials, you’ll quickly pick up what they’re getting wrong and right. If you can turn that around and make it part of your offer and guarantee, you have a unique value proposition – everyone else does X, we do Y, and that’s why we’re better…
Put it front and centre – Marketing is a lot easier if you have a single clear and simple offer with built-in risk reversal. Bank fees used to be through the roof in SA until Capitec crashed onto the scene in 2001 with one simple promise – the lowest bank fees. (Everyone else has since jumped on that bandwagon, but that’s how they got started). Put your offer right at the top of your website, make it your meta title, and make it strong enough to be the hook of every ad.

Finally, we love to feature local startups doing interesting things! If you are one of them, let us know by hitting reply…

DID YOU LIKE THIS WEEK’S OPEN LETTER?

It’s our mission to add value, entertain, to delight. Did we miss the mark this week? Hit a link below and give us some feedback….please.