Investment company Knife Capital’s entrepreneurial leadership programme, Grindstone, has concluded its second intake with the participating companies experiencing explosive business growth.
The year-long programme takes businesses with proven traction through an intensive review of their strategies and provides them with the necessary support to build a foundation for growth through the transfer of skills and introduction to relevant business networks.
Grindstone partnered with entrepreneurial-spirited corporates like FNB, ENS Africa, Microsoft BizSpark, Moneyweb, M&C Saatchi Abel, Ansarada, PwC and Mazars to provide services and expand networks. Apart from the Knife Capital Grindstone team, a generous community of respected contributors worked with the participating companies to improve business growth gaps that were identified through Knife Capital’s due diligence automation platform, YueDiligence.
Upon intake, the average Grindstone SME had been running for six-and-a-half years, employed 12 people and the founders were 36 years old. Some of the stellar results achieved by the 12 participating companies in just one year include:
* Average growth of 64% year-on-year revenue;
* Addition of R65-million in revenue across the companies;
* Creation of 70 new, direct jobs;
* 22% increase in YueDiligence score (measuring key business fundamentals as a platform for growth);
* Doubling their number of key customers;
* Expectation of 72% CAGR (compound annual growth rate) over the next three years compared to 49% at the start of the programme; and
* 14% increase in efficiency measured by average revenue generated per employee.
“The real value of the Grindstone programme is that the participants are enabled to rapidly react to windows of opportunity for corporate activity,” says Andrea Bӧhmert, director at Grindstone. “The inbound interest from local corporates and international investors to partner with these companies are encouraging, and there are some real success stories in the making,” she says. “Over half of the Grindstone II participants received offers for full or partial acquisition during the past 12 months. Some of these opportunities are still under evaluation and/or negotiation, but being in the position to decline such offers if not optimal is a clear sign that the companies back their own growth strategies.”
Transport information startup WhereIsMyTransport raised a R12m funding round from a group of investors to internationalise its operations and enable the company to build solutions that serve developing cities worldwide. Grindstone Alumni iKubu was acquired by GPS navigation giant Garmin for its bicycle radar technology. Subsequently, Time magazine named the Garmin Varia as one of the Top 10 Gadgets of 2015.
The company that showed the most improvement in the programme against set growth metrics is B2B marketing agency MPULL which won the R100 000 Grindstone prize to inject into the business. MPULL was responsible for almost half of the jobs created on the programme and increased its revenue 10-fold while improving its YueDiligence score by 24%.
MPULL CEO Daryn Smith shares some Grindstone insights: “Your entrepreneurial business is not scalable if any operational part is dependent on you; every journey ends – planning for exit ensures that your vision lives on when you are not around; and lastly – it is not good enough to have an idea or concept in your head as this cannot be uploaded to a due diligence data room.”