HBD Venture Capital has taken a R9 million stake in online restaurant communications company Ordertalk.com as part of an overall strategy to extend its private equity investment fund by another year.
Famously known as South African Internet billionaire Mark Shuttleworth's first investment company, HBD Venture Capital still styles itself as the country's only early stage investment house, although its current fund is aimed at companies that have established a revenue stream.
Ordertalk.com is a Cape Town company that develops catering and food management software with the aim of allowing restaurant patrons to order online. Patrons select the dishes they want with the ingredient mix required. The company also allows "curb-side" ordering, which means the client can order and pay in advance and then collect the food at the premises on the way home.
HBD Venture Capital portfolio manager Eben van Heerden says research has shown that if clients have the ability to state exactly what they want and how they want it prepared, they are inclined to order more food as opposed to the usual method of just taking what is displayed on the Web page.
"However, this requires a very sophisticated system that manages stock and preparation times."
Van Heerden says Ordertalk is hosted in the US city of Dallas and has several clients in the US and the UK already.
"The company was founded five years ago and it has completed development of its system. The beauty of it is that it really is scalable and it works," he says.
Van Heerden says this market is highly-competitive, but Ordertalk had the foresight to begin developing its software early on, so it should be able to steal a march on rivals.
HBD Venture Capital has the option of super-sizing (increasing) its stake in Ordertalk, however, Van Heerden says the fund's horizon is usually about four years.
Julia Long, HBD Venture Capital CEO, says a decision has been taken to extend the firm's fund by another year, with the aim of taking stakes in at least another three companies with the average value of about R20 million to R25 million.
"We originally planned to run the fund for two years, but 18 months in, we know there are still many more early stage entrepreneurial businesses in SA with global potential," she says.
Some of HBD Venture Capital's investments include technology companies EDH and Fundamo.
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