Animation and gaming company Sea Monster has secured $1-million (about R16-million) in funding from FirstRand’s Vumela Fund, managed by Edge Growth.
Sea Monster is a nine-year-old business which sells digital solutions on a project basis that solve communication and change management challenges at scale. It employs 35 people – from designers to animators, developers and business analysts. Its client base includes Lemonade Day (US), FNB, Capitec, Old Mutual, Shell and the SA Reserve Bank.
Sea Monster CEO Glenn Gillis says the deal enables the company to transition from being a service business, working on a project to project basis, to a product business, developing its own solutions to generate annuity revenue.
“We realised that if we were to unlock the potential in Sea Monster, we’d need to find investment to build off the shelf solutions that we can sell to multiple customers in South Africa, and that will also aid us in our global expansion plans,” Gillis says.
The deal allows Sea Monster to tap into FirstRand’s supplier development strategy and Edge Growth’s post investment support, which will help it to do that.
“There can be real magic in moving beyond pure supplier/client relationships,” comments Gillis, “but these do require longer term horizons, new business models and even greater levels of trust. For example if Sea Monster can build a product that is used across FirstRand, but is also free to sell this into other verticals, or globally, everyone will be better off.”
A further critical factor is that the deal makes the company 51% black-owned, by virtue of Vumela’s minority stake in the business and the company’s own empowerment structures.
“By becoming 51% black owned we demonstrate our commitment to creating full value for all our shareholders, but it also frees us to focus on real transformation, rather than the tick-box exercise that BEE has become for so many,” Gillis says.
“Ultimately we want to continue to grow our talent base, not just for our company but for the country as a whole, and of course we want to drive real transformation in the process.
“All of this aligns exactly with Vumela’s mandate to invest in high growth small, medium and micro size enterprises with good economic and impact returns. This makes it a great partnership,” he concludes.