Platform Capital has officially launched its operations in South Africa to provide strategically driven investments with a focus on developing the untapped potential of the country’s SMME sector.
Platform Capital’s entry into South Africa is strategic because it recognizes that small businesses are the workhorses of the South African economy, employing between 50% and 60% of its workforce while contributing about 34% of its GDP. This move is in line with the company’s commitment to deploying patient, value accretive capital alongside international and local value investors to create champion businesses with the potential for regional and global scale.
“We are excited to officially launch our operations in South Africa after successful operations in other regions and see a great opportunity to invest in, and further provide the right type of capital structure to help local businesses achieve their goals. If you look at the statistics, the rest of Africa is making giant strides to move forward with micro and small businesses, but South Africa is lagging,” says Platform Capital chairman Dr Akintoye Akindele.
According to Dr Akindele, data suggests that the Nigeria, Egypt, and Kenya markets are ahead of South Africa in terms of investor attractiveness of entrepreneurs or global partners who would want to partner with them. This should not be the case because South Africa has the most developed financial markets coupled with a young population that is very exposed, informed, and knowledgeable.
Platform Capital is well-positioned to empower and provide entrepreneurs with the required support to identify and build sustainable and competitive companies that will contribute to the economic growth of Africa.
Platform Capital South Africa is a subsidiary of Platform Capital Mauritius, an investment and advisory firm with offices in the UK, USA, Nigeria, Ghana, Kenya as well as Mexico with over 400 employees working across the firm boasting over 160 direct and indirect investments. The South Africa subsidiary was established in 2021 and has invested in more than five companies across various sectors.
“There are approximately 11 unicorns on the continent and none of them are South African,” adds Dr Akindele. “This means that there are currently no privately held startup companies in South Africa valued at over $1 billion and yet the opportunity is massive.
“There is a high unemployment rate predominantly with the youth who are people with fresh ideas and the capabilities to start a business and grow it. We can help those young people to access the right type of capital structure to achieve their goals and contribute to creating a vibrant economy as we have seen in the Nigeria and Kenya markets for example.”
Through Platform Capital, entrepreneurs with compelling business ideas will have a home to incubate and develop ideas to a level where the start-up will be able to access the right capital and in turn get connected to the global partners that will help scale their businesses. Platform Capital will look to invest in 20 companies every year and expects that most of them will become listed entities.