Cape Town-based venture capital firm Knife Capital says its fourth Grindstone Accelerator programme cohorts have achieved positive growth results in a tough South African economic climate.
Grindstone is a structured entrepreneurship development programme, jointly owned by Knife Capital and SME market access company Thinkroom Consulting, aimed at assisting high-growth innovation-driven SMEs to become sustainable and fundable.
The year-long programme takes 10 South African SMEs with proven traction through an intensive review of their strategies and provides them with the necessary support to build a foundation for growth in becoming more investable, sustainable and exit-ready.
The fourth Grindstone Accelerator cohort just concluded, helping the participating SMEs to circumvent the challenging South African economic environment.
Participants include online shopping assistant OneCart, smart security platform Sentian, warehouse management solutions provider Cradle Technology Services, short-term insurance platform Ctrl, online matching platform Digger App, geospatial data analytics company Locstat Systems, peer-to-peer marketplace for storage and parking Sxuirrel, alternative credit scoring platform Vizibiliti Insight Africa, and online performance and incentive management toolkit Sparkfolios.
In only one year, the 10 South African SMEs grew revenue by 36%, collectively adding R35 million to their top line, creating 27 new jobs and increasing business fundamentals by 33%, while becoming more productive, according to Grindstone Accelerator.
Over the next three years, the companies are eyeing growth prospects of 88%, fuelled by venture capital and angel investment, which has already been raised by some participants, it adds.
“We initially set out to prove that by offering the right guidance and support to coachable entrepreneurs, we can engineer growth on a significant and sustainable scale,” says Andrea Bӧhmert, co-managing partner at Knife Capital.
“The fact that another cohort of Grindstone companies has experienced significant growth and investment while increasing their business fundamentals clearly demonstrates it is possible. We are extremely proud of how this cohort of entrepreneurs embraced the Grindstone learnings from all our value-adding partners, and we built lasting relationships and had fun in the process.”
Of the top Grindstone4 companies, Knife Capital invested in Cradle Technology Services’ platform, Granite WMS, to expand the warehouse management software business internationally.
Locstat Systems achieved the highest growth across all metrics over this period, compared to its peers. It won the Grindstone prize of R100 000 to spend on an international business development initiative of its choice.
Ryno Goosen, MD of Locstat Systems, says the Grindstone programme triggered a full rebranding and new articulation of the Locstat value proposition.
“Grindstone was very timely and beneficial as we looked to develop the Locstat brand. The programme content, speakers and Knife Capital leadership team were all top drawer. There was variation, credibility and honest logical mentoring.”
This year, Knife Capital and Thinkroom Consulting have partnered with the SA SME Fund, Deloitte, FNB, Webber Wentzel and the BillyBo Group to run the next Grindstone5 programme currently under way in Johannesburg.
Companies which have been through Grindstone include radar start-up iKubu (acquired by Garmin), augmented reality animation and gaming company SeaMonster, online payment gateway Payfast (recently acquired by DPO Group), financial inclusion business Picsa and Bitcoin blockchain anti-piracy solution Custos.
Knife Capital has also invested in ticketing solutions provider Quicket via its SARS Section 12J venture capital company KNF Ventures.