WDB Investment Holdings (WDB) has taken a 30% stake in Seed Engine, while venture capital company Grovest has also taken a 27,5% stake in the organisation, which incorporates Seed Academy.
Faith Khanyile, CEO of WDB, says its investment brings together a common concern that these organisations are working to address, the transformation of South Africa’s economy by developing sustainable entrepreneurial businesses.
WDB, incorporating the WDB Trust and WDB Investment Holdings, has a 25-year track record of delivering high-impact socio-economic programmes that directly improve people’s lives, especially the poorest and most neglected. “We needed a strategic partner that would instantly allow us to scale up our efforts around entrepreneurship in South Africa, especially amongst women. Seed Engine was one of the first ICT accelerators in this country, and this dynamic for-profit social enterprise is now supporting the entire entrepreneurial ecosystem from startup through to supplier.”
Jeff Miller, CEO of Grovest, explains that his organisation brings an in-depth understanding of the entrepreneur and venture capital ecosystems, a solid track record of successful investments and over 100 years combined management experience in capital raising, listings, MBOs and trade sales.
Donna Rachelson, CEO of Seed Engine and Seed Academy, says entrepreneurs are the job creators of the future and these investments have created strategic partnerships that will amplify our training, support and funding mechanisms at every stage of the entrepreneurial lifecycle. “It will help unlock well-known barriers the small business sector faces, like access to markets and access to funding.
“Incubation is not producing the results SA needs and entrepreneurs are battling to build and scale their businesses and create jobs. We take a fresh look at our entrepreneurial system and make quick, sustainable changes that result in jobs, wealth and certainty. Through the WDB and Grovest we will be able to tap into corporate and government relationships and networks that will help Seed Engine reach deeper into the communities and sectors that need the most urgent support.”
Khanyile says that the WDB’s 25-year track record is aligned with the future vision of Seed Engine. “Our investment is likely to increase to 51% and as a women’s company, we have an appropriate bias towards empowering female entrepreneurs and being a meaningful active investor. The partnership serves both the business and social agenda of WDB.”
Rachelson says: “The BEE deals of the past are no longer relevant. We want to create genuine mechanisms to expand South Africa’s ‘missing middle’. There is no doubt, that the investment by a black-owned entity focused on impact investments will cement Seed Academy’s position in enterprise and supplier development in South Africa.
“A key focus of our work is to make sure that startups progress steadily into enterprises and become registered vendors that provide reliable products and services to the supply chains of public and private South African companies.
“The WDB’s shift away from ordinary to high impact and measurable investments fits with Seed’s culture of action and impact.”
Says Khanyile, “We liked Seed Engine’s emphasis on black women and youth-owned businesses. We were impressed that their programmes have trained 600 entrepreneurs, created and supported 300 enterprises and an average of three jobs per enterprise. Seed Engine has touch points at every step of the way of the business life-cycle from startup through to sustainable SMEs and successful suppliers.”
Rachelson says Seed Engine was impressed that some 180 000 rural women had benefited from WDB Trust loans worth more than R400-million, 3 000 women had received literacy and basic business skills training, and over 300 permanent jobs had been created by the WDB Group since inception.
“Many people in South Africa were not raised in an entrepreneurial environment in which they were encouraged to take an idea and grow a business,” says Khanyile. “More than ever before, there is an urgency for young South Africans and female entrepreneurs in particular to be assisted in taking their ideas forward and build businesses. Our young people need jobs, and we need to help them create jobs for themselves, their families, and their communities.”