The Local Scale Up (LSU) was launched by Endeavor and the SA SME Fund early in 2021, with a focus on helping to scale a cohort of 18 tech-enabled businesses both locally and internationally.
In the past year, the collective revenue of these businesses grew by R460-million to R1,5-billion, a 514% per annum average increase.
In addition, they increased staff by 45%, creating more than 400 jobs and employing more than 1 500 people of which over 60% are black.
The entrepreneurs also managed to raise over R1-billion in capital from both local and foreign investors.
The LSU businesses are primarily innovative tech-enabled businesses, including insurtechs such as Voyc and Carscan, fintechs such as MamaMoney and Finclusion, private security platform Aura, home services marketplace Kandua, and fast-moving consumer goods marketplace for rural areas Yellow. Many of these businesses have also branched out internationally.
Adrian Gore, CEO of Discovery and chair of the SA SME Fund, comments: “Successful entrepreneurs are not reliant on thriving economies – they are economy agnostic. When economies turn down, entrepreneurs turn up. Entrepreneurs thrive in highly dynamic environments. Being nimble and fast to adapt is a key competitive advantage for high-growth entrepreneurs.”
He believes in investing and building during difficult times. “We need to change our narrative from decline to transition, from pessimism to opportunity. Smart entrepreneurs will see opportunities where others do not.”
The LSU entrepreneurs receive on-demand, tailored support from the Endeavor network which spans 40 markets, has more than 2 000 entrepreneurs and over 5 000 mentors globally.
Alison Collier, MD of Endeavor SA, explains: “The right introduction at the right time can save an entrepreneur many months or years of work, which is crucial to support entrepreneurial activity.
“The programme is geared towards helping entrepreneurs secure clients and funding six to 18 months quicker than they would otherwise, which helps to turbocharge these businesses. This is one of the key reasons for the LSU programme’s success.”
There is also another reason for their success, according to Collier: “LSU entrepreneurs eat, live, and breathe their businesses. They are emotionally resilient, optimistic, and believe in their ability to change their markets. Their attitude drives their success, not the other way around.”
Endeavor and the SA SME Fund believe that these high-growth entrepreneurs are one of the primary drivers of economic growth and job creation in South Africa.
Melvyn Lubega, co-founder of Edtech Go1 (valued at over $1-billion) and Endeavor board member, notes: “The better the quality and scalability of entrepreneurs, the more opportunity they create for economic growth and job creation.
“It is for this reason that we put our energies into identifying and helping scale these businesses, providing them with the confidence to catapult themselves into success.”