Business process outsourcing (BPO) group Aegis BPO Holdings SA will invest R1.5 million in empowered start-up companies in the sector, in a bid to grow the pool of local vendors.
The company will provide the start-up entities with knowledge and skills transfer in addition to financial support. Its initial investment is in local BPO company Iningi Investments.
Aegis will provide assistance worth over R1.5 million in tranches over the next three years, in a bid to grow the 83% black-owned company into a sustainable business with at least 100 staff members.
Kobus van der Westhuizen, VP of Aegis BPO SA, says the company's “objective is to ensure Iningi Investments becomes a successful player in the BPO market, and we are prepared to get involved, to support them and ensure the company grows to be a significant player in the industry”.
“Financial support is essential for any start-up, especially one in the comparatively expensive BPO sector; however, sharing of knowledge is invaluable.”
Free capital
Van der Westhuizen says Aegis's investment takes the form of incubating start-up companies so that they can become sustainable. “It's almost like building an industry.”
risk Iningi would usually have to carry on its balance sheet. The company has also provided Iningi with seed funding and will help it close smaller deals to grow the business.
Van der Westhuizen explains that BPO is a capital-intensive industry and is also risky, because of the performance targets that need to be met. Aegis will assist Iningi by taking control of these aspects of the business as part of the incubation process, he explains.
Once Aegis has grown Iningi to 100 staff, which Van der Westhuizen aims to do by the end of this year, the company will be spun out to run on its own. Van der Westhuizen adds that Aegis is not taking an equity stake in Iningi, and will not ask for the investment to be re-paid.
“Investments should not be just about financial support, but should also be about genuine skills and knowledge transfer,” says Bulelwa Koyana, CEO of Business Process Enabling SA. “We would like to see more of these kinds of mentoring deals being made as we believe they are most effective way of securing long-term growth in the sector.”
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