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  • Covid-19 and African tech startups roundup [02/04/2020]

    Finnish development financier Finnfund has invested $1-million in Kasha, an e-commerce platform that provides hygiene and self-care products to women in East Africa, which could prove vital under Covid-19.

    A number of other tech startups have developed Covid-19 offerings or are providing their tech services and platforms for free — the latest being SA’s Digemy and DragonWorks Software.

    With the coronavirus (Covid-19) headlining news all over the world, Ventureburn has launched a regular daily roundup on the virus and how it is affecting Africa’s tech startup sector.

    Those with any news releases relating to Covid-19 and Africa’s tech startup sector can send these to editor@memeburn.com.

    A number of tech startups have developed Covid-19 offerings or are providing their tech services and platforms for free

    Here then is the latest on the coronavirus and African tech startups:

    Ecommerce site nets funding: Finnish development financier Finnfund has invested $1-million in Kasha, an e-commerce platform that aims to improves women’s access to health, hygiene and self-care products in East Africa. Kasha is serving as a safe way to get hand sanitisers, antibacterial soaps, masks, gloves and eventually Covid-19 diagnostic rapid tests, Joanna Bichsel (pictured above), the startup’s CEO said (see this story).

    Covid-19 challenge finalists announced: Egyptian angel investor group Cairo Angels has announced the four finalists of its coronavirus-focused pitch challenge, tech publication Disrupt Africa reported in an article earlier today. The four are: Kofoof, Markazzy, NIoTEK and Tactful AI. The winner, who will be announced soon, will take away a $6000 cash prize.

    Investor announces debt facility: Swiss headquartered impact investor Vital Capital has announced a new debt facility to provide loans to businesses to help them get through the coronavirus pandemic while continuing to offer essential services. The vehicle will primarily target companies involved in agro-industry and processing, healthcare, sustainable infrastructure and education, and is initially launching in Kenya and Uganda (see this story).

    Sanitiser out of stale bread: Researchers at Stellenbosch University say they have discovered how to make hand sanitiser using stale bread crumbs, Business Report said in an article yesterday.

    Startup launches Covid-19 platform: SA startup Digemy has launched a gamified, data-light e-learning platform to educate users on Covid-19, tech publication Disrupt Africa reported in an article yesterday. It said Digemy has partnered marketing agency The Loudhailer to launch a course on Covid-19, which aims to explain the virus in simple terms that anyone can understand.

    Free leave management system: LeavePro, a cloud-based leave management solution and a division of DragonWorks Software, has announced that it will be offering its platform free of charge to SA companies amid the coronavirus pandemic. LeavePro’s online leave management solution is designed to automatically track the leave balances for all staff, eliminating the need to use spreadsheets, paper and other tedious forms of leave management.

    Essential Guide for SMME’s during lockdown: Invest Cape Town has launched an online guide that provides critical information for business, including where to find the regulations applicable to Covid-19 , a clear explanation of what constitute essential goods and services, how and where businesses can apply to operate as an essential service, as well as all information related to government funding available to small businesses. Find it here.

    Read more: Covid-19 and African tech startups roundup [01/04/2020]
    Read more: Covid-19 and African tech startups roundup [31/03/2020]
    Read more: Covid-19 and African tech startups roundup [30/03/2020]
    Read more: Covid-19 and African tech startups roundup [27/03/2020]
    Read more: Covid-19 and African tech startups roundup [26/03/2020]
    Read more: Covid-19 and African tech startups roundup [25/03/2020]
    Read more: Covid-19 and African tech startups roundup [24/03/2020]

    Featured image: Kasha co-founder Joanna Bichsel (Facebook)

    The post Covid-19 and African tech startups roundup [02/04/2020] appeared first on Ventureburn.

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  • Covid-19 and African tech startups roundup [03/04/2020]

    US based SA entrepreneur and Civic founder Vinny Lingham has been under a lockdown for two weeks now and has been stockpiling food since February, he said in a podcast yesterday.

    Meanwhile, Swiss emerging market startup competition Seedstars announced the five finalist startups that will compete in today’s summit, for a chance of an investment of to $500 000. For the first time the event will be held entirely online.

    With the coronavirus (Covid-19) headlining news all over the world, Ventureburn has launched a regular daily roundup on the virus and how it is affecting Africa’s tech startup sector.

    US based SA entrepreneur Vinny Lingham has been under a lockdown for two weeks now and has been stockpiling food since February

    Those with any news releases relating to Covid-19 and Africa’s tech startup sector can send these to editor@memeburn.com.

    Here then is the latest on the coronavirus and African tech startups:

    Online Seedstars Summit 2020: Swiss emerging market startup competition Seedstars will today hold its annual summit where the winner of the Seedstars World stands the chance to net an investment of up to $500 000. For the first time the event — usually held in Lausanne, Switzerland — will be held entirely online. The five finalist startups are Resync (Singapore), Optiyol (Turkey), StudyFree (Russia), Baubap (Mexico) and Pezesha (Kenya). The summit kicks off at 2pm CET today.

    CIPC taking key services online: SA’s Companies and Intellectual Property Commission (CIPC) has taken some of its key services online and suspended major functions such as business rescue proceedings during the country’s Covid-19 lockdown, Business Report said in an article yesterday. Only fully automated services will be available to the public. All other services will be reactivated after the end of the lockdown.

    Free Knife Capital webinars: In response to Covid-19 and to support small businesses, the Grindstone Accelerator (of which the SA venture capital firm Knife Capital is a founding member) will next Tuesday (7 April) be hosting four live video streaming micro-sessions of their popular full day Find-Make-Grow-Realise (FMGR) programme. The event will be live streamed exclusively to any company founders and their employees who want to understand the FMGR process. Register here.

    Health tech adapts platform: Cameroonian e-health startup OuiCare has adapted its online platform to provide users with access to information and resources amid the Covid-19 virus, tech publication Disrupt Africa reported in an article today. OuiCare’s platform offers users easy, secure and fast access to doctors, medical data and medical facilities.

    How Vinny deals with Covid-19: US based SA entrepreneur and Civic founder Vinny Lingham (pictured above) has been under a lockdown for two weeks now and has been stockpiling food since February. In a podcast and video with Tech Central’s Duncan MacLeod, the former Shark Tank host explains why he recently moved to San Diego and how he reckons the virus will change the world going forward and how bitcoin and investment will shape up during the crisis.

    Read more: Covid-19 and African tech startups roundup [02/04/2020]
    Read more: Covid-19 and African tech startups roundup [01/04/2020]
    Read more: Covid-19 and African tech startups roundup [31/03/2020]
    Read more: Covid-19 and African tech startups roundup [30/03/2020]
    Read more: Covid-19 and African tech startups roundup [27/03/2020]
    Read more: Covid-19 and African tech startups roundup [26/03/2020]
    Read more: Covid-19 and African tech startups roundup [25/03/2020]
    Read more: Covid-19 and African tech startups roundup [24/03/2020]

    Featured image: US based SA entrepreneur and Civic founder Vinny Lingham (Facebook)

    The post Covid-19 and African tech startups roundup [03/04/2020] appeared first on Ventureburn.

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  • Russia’s StudyFree named the winner of Seedstars World 2020

    Russian edtech startup StudyFree has been named the Seedstars World 2020 winner in an online event held by Seedstars this afternoon and walks away with up to $500 000 in equity investment.

    StudyFree, which was founded by Dasha Kroshkina in April 2019, offers a one-stop platform that helps students to get successfully admitted into universities worldwide with full financing.

    Kroshkina says the startup has almost 23 000 users form 108 countries. In all 7% of users are paid-users and the startup generated $60 000 in revenue last month. The startup has yet to raise any funding so far.

    This year was the first time that Seedstars, a Swiss emerging market startup competition, has held the event — usually held in Lausanne, Switzerland — entirely online.

    Russian edtech startup StudyFree has been named the Seedstars World 2020 winner

    The four other finalist startups were Resync (Singapore), Optiyol (Turkey), Baubap (Mexico) and Pezesha (Kenya).

    A total of 5000 startups from 86 countries applied to the Seedstars World 2020 competition, Seedstars CEO Aalisée de Tonnac said in an online press conference earlier today.

    From the 5000, about 500 startups were selected to present at various pitches in a number of cities across the world that kicked off in about the middle of last year and ran over the remainder of the course of the year.

    From these pitching events about 80 startups were then selected to attend five regional summits, where 40 startups were selected to attend this year’s conference. This list was then narrowed down to the five finalists that pitched to investors online today.

    Featured image: StudyFree founder Dasha Kroshkina (Facebook)

    The post Russia’s StudyFree named the winner of Seedstars World 2020 appeared first on Ventureburn.

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  • SA’s Custostech lays off staff after VC sues startup for $4.5m over failed investment bid

    Stellenbosch-based startup Custostech says it has been forced to lay off most its staff after SA venture capital (VC) company HAVAÍC sued the startup for $4.45-million, alleging its founders reneged on an investment agreement.

    In legal papers, Custostech, which uses an innovative blockchain solution to protect media such as films from piracy and has helped successfully protect about 600 film titles, disputes having reneged on the agreement.

    The startup’s founders Gert-Jan van Rooyen and Fred Lutz argue that they never signed the final agreement to accept the VC’s investment.

    Van Rooyen, who is the startup’s CEO, told Ventureburn, last week that the startup had laid off eight of its 10 employees and that effective from 31 March would be operating on a skeleton staff of two part-timers to ensure that the company could continue to manage contracts with its current clients.

    He and Lutz have also had to resign in order to cut costs and are working part-time on the startup, with the hope of starting things up again once the matter is resolved.

    Custostech says it has been forced to lay off most its staff after SA VC HAVAÍC sued the startup for $4.45m, alleging its founders reneged on an investment agreement

    Van Rooyen said the startup — which has raised a total of R28-million since he, Lutz and Herman Lintvelt founded it in 2014 — was forced to lay off staff after the VC issued summons to sue the startup, alleging he and co-founder Fred Lutz turned down the VC’s investment offer of R3.5-million.

    While the case has yet to be heard in court, the Cape Town based VC argues in a summons filed in the Western Cape High Court on 20 August last year that its investors lost out on a valuable business opportunity, after the deal was not signed.

    The summons was issued against Custostech and its subsidiary CMT Research Proprietary Limited, both of which the VC was going to invest in.

    The VC says in the summons, that the $4.45-million in damages is calculated from “the value of the equity it would have held in the startup on the strategic exit date, divided by the proportional size of the VC’s shareholding in the startup, less the sum of R3.5-million and the $1-million Series-A investment”.

    Van Rooyen confirmed that the startup was in the process of raising a Series-A round after having run short of cash. HAVAÍC’s investment was to form part of the round.

    He and Lutz argue that the VC’s legal bid led to two US investors that had already committed to invest a total of $300 000 in the startup pulling out. Added to this, a Hong Kong-based VC investor that was to invest an amount to make up for the startup having not gone with HAVAÍC’s contribution, also pulled out.

    ‘Offer was accepted argues VC’

    HAVAIC argues that on 18 April 2019, one of the VC’s partners, Grant Rock, sent the startup’s founders a written offer of purchase, after the two parties signed a non-binding agreement on 13 March 2019.

    Part of the conditions of the non-binding agreement was that beyond investing in the round, the VC would act in an advisory capacity for the upcoming round, for which it would be remunerated a fee of 3.95% on the investment amount of each investor committing to the round.

    The purchase agreement of 18 April, says the VC, was further supplemented by a written offer from HAVAIC CEO Ian Lessem to invest R3.5-million.

    HAVAIC says Custostech, represented by Lutz accepted Lessem’s offer in writing on the same day.

    In an email to Lutz, dated 29 April 2019 and with the subject line “Re: Call about advisory agreement”, Lessem wrote: “Hi Fred, To confirm, we would like to advance R3.5m. You happy with that? Ian”.

    Lutz responded on the same day, by saying: “Hi Ian, Yes, thanks. We are happy with that. I’m getting the final ducks (getting final buy-in from everyone before they recieve the final documents) in a row this side, and then I’ll send out the resolutions to our board and shareholders. I’ll keep you posted.”

    In a second email, sent to Lessem the following day, Lutz notes that the startup has received “buy-in” for the signing of the agreement.

    “Hi Ian, I’ve had discussions with the board members, and we have buy-in for the agreement. To lay the cards on the table, Anita (Nel — CEO of Innovus, a shareholder in Custostech — Ed) is disgruntled by the fee on the investment from the university. She will not block us from taking the investment, but she is the type to hold grudges and burn bridges.

    “In the call with her where I explained that this was what we already agreed upon, she mentioned that she “was” excited to work with HAVAIC for some of the other university spinouts. As I mentioned, she and the rest of the investors will sign off on the agreement as-is, but if you were thinking about building a long term relationship with the university directly, I would consider making a concession, but that is completely up to you,” writes Lutz.

    ‘We never signed anything’

    In response in its plea (its legal response and defence to HAVAIC’s summons) filed on 26 March 2020, Custostech denies that the startup’s founders Lutz and Van Rooyen, signed anything other than the non-binding agreement with the investor on 13 March last year.

    The non-binding agreement states that a break fee of R50 000 must be paid by the startup to HAVAIC should the company or its founders delay or fail to sign the acceptance of the offer within three months.

    In a legal letter seen by Ventureburn, the startup was issued by a letter of demand by the VC’s attorneys Webber Wentzel, on 17 May.

    According to Van Rooyen the legal letter was issued on the same business day after the startup communicated to the investor that the board had decided not to agree to accept the investment offer.

    HAVAIC contends in their summons that Lutz’s agreement in an email to the investor, can be taken as confirmation of the agreement for the VC to invest.

    However, the founders in their plea contend that the agreement never came into force because they hadn’t signed the actual Convertible Promissory Note.

    The startup’s founders single out that while they made comments or amendments on the actual agreement form, they had left blank spaces where signatures should have been.

    “The document entitled ‘Convertible Promissory Note’ had spaces for signature by the defendants, above which was recorded that ‘in witness whereof’ intending to be legally bound, each of the companies has executed and delivered this Note as of the date first written above’,” they argue in the plea.

    Van Rooyen pointed out to Ventureburn this week that negotiations between the startup and the VC had not yet been concluded, with a lot of “to-ing and fro-ing” around specific terms in the convertible note.

    “Note that the full form of the convertible note hadn’t even been finalised, and is still in ‘track changes’ mode with comments and tentative edits. So in either case it’s not clear what would have been ‘agreed’ to,” he added.

    Commission fee

    Van Rooyen said the board was concerned chiefly about the 3.95% commission fee that HAVAIC had demanded it take on any new investors brought into the startup.

    The startup’s biggest shareholder, with a 26% share, is Stellenbosch University’s technology transfer company Innovus.

    The startup also has several other investors including two US-based VCs, a local angel investor, and a US-based angel investor. In addition, the Technology Innovation Agency (TIA) had in the past invested R6-million in the startup.

    In a call to Ventureburn this week, HAVAIC’s Rock said before it sought legal redress, the VC had met with Innovus in an attempt to try to “resolve the issue”  and had even suggested that the VC could drop its advisory service and commission, in order to secure the investment.

    However, Nel argues that the VC made no offer to drop the 3.95% fee during their conversation. “In fact, (it was) quite the opposite — it was a ‘take-it or leave-it’ discussion,” she said.

    ‘Simply trying to enforce our rights’

    It is understood that Stellenbosch incubator LaunchLab even approached the Southern African Venture Capital Association (Savca) to intervene, but that the organisation said it couldn’t get involved until the matter was resolved in court.

    Van Rooyen said he and Lutz did try to convey to the VC that litigation as first recourse is damaging to the local startup environment.

    “Legal fees like these erode value from the ecosystem; they’re paid for by existing investors, and through the hard-fought revenue a startup generates.

    “There are so many other options, of which just stepping away from a deal that isn’t working out is probably the most pragmatic. If there truly is a dispute, mediation – even arbitration – are more sensible routes to pursue in such a vulnerable local startup ecosystem,” said Van Rooyen.

    But speaking to Ventureburn, Rock stressed that the investor was simply “trying to enforce our rights in terms of an agreement we had”.

    Rock said on the understanding that the startup had agreed to the investment, the VC had gone ahead and got the money from its private investors, mainly South Africans he said. The money was in the VC’s bank account ready to invest, he said.

    “They (Custostech) told us to get the money ready and that they need the money by a certain time,” he said.

    He said the VC’s investors were in agreement about suing the startup. “We asked investors what to do, they said go ahead and litigate,” he said, adding that it was never the VC’s intention to “put them out of business”.

    Featured image (from left to right): Custostech founders Gert-Jan van Rooyen, Fred Lutz and Herman Lintvelt (Supplied)

    The post SA’s Custostech lays off staff after VC sues startup for $4.5m over failed investment bid appeared first on Ventureburn.

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  • VC4A calls on mentors in and around Johannesburg to take part in virtual programme

    VC4A has opened applications to mentors who are keen to take part in a virtual mentor-driven capital programme and are situated in or near Johannesburg.

    VC4A’s online platform aims to link African tech startups with investors. The programme will run from June to September, with exact Zoom session dates still to be confirmed, the organisation said.

    The programme aims to help mentor to support entrepreneurs while learning to think and act like a savvy business angel.

    Applications close on 20 April.

    “Angel investing is of course about providing early-stage companies with investment capital, but the expertise, time and network that you, as a business mentor can share with entrepreneurs is also vital to their growth and success,” said VC4A.

    VC4A is calling on mentors situated in or near Johannesburg to apply for a virtual mentor-driven capital programme

    The programme is aimed at those based in or close to Johannesburg, who are senior business professionals with multiple years of experience in corporate, financial or with an entrepreneurial background.

    Participants should be interested in the startup ecosystem and keen to support startup companies. In addition, they must be able to spend at least four hours a month mentoring a startup entrepreneur.

    The programme includes a complimentary ticket to the Africa Early Stage Investor Summit (AESIS) 2020, which usually takes place in November each year.

    The programme is backed by the Southern African Innovation Support (Sais), a regional initiative that supports the growth of new businesses through strengthening innovation ecosystems and the promotion of cross-border collaboration between innovation role-players.

    Featured image: Participants at the 2018 Africa Early Stage Investor Summit (AESIS) (Facebook)

    The post VC4A calls on mentors in and around Johannesburg to take part in virtual programme appeared first on Ventureburn.

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