2017: A Year in Review
We have come to the end of 2017 and what an epic year it has been. AlphaCode welcomed a host of new members and forged new partnerships. Awards were won, funding was locked down, and we got to know you better at the various events held throughout the year.
We made several high profiles investments into three leading fintech businesses and have an attractive pipeline for 2018. The 2017 investments include Entersekt which offers authentication and mobile security solutions that make the digital world safer to bank and shop; Prodigy Finance an international fintech platform that has developed the world’s first borderless credit model, offering loans to postgraduate students accepted into business, engineering, law and public policy degrees at the world’s top universities and Luno, one of the world’s most popular Bitcoin platforms with over one million customers, making it easy for people to buy, sell and learn about digital currencies.
We also facilitated the investment of another R4 million into four black-owned financial services businesses at our third annual BEE Pitch Evening in partnership with Bank of America Merrill Lynch and Royal Bafokeng Holdings. To date, the BEE Centre of Excellence has disbursed R13 million to 15 businesses over the past two years. This year’s winning startups were:
Commuscore, an alternate credit scoring provider that captures payment and lending behaviours of consumers and micro-lenders in the informal sector.
Investsure provides fraud insurance to shareholders against losses in share price caused by actual or perceived deception committed by management.
Cascade Cover reduces the cost of insurance and gives the savings back to the consumer through an insurance savings product.
Everest Ventures, an entrepreneurial SME finance advisory service and investment management company offering comprehensive services such as capital raising, business case solutions, acquisitions and disposals and financial reporting.
Recipients of the 2015 and 2016 funds continue to see positive business growth notably Heritage Capital, which was able to bring on a third partner full time into the business and secure an anchor investor to close its first fund.
Attracting global investment
In addition to Prodigy Finance and Luno who both received investment from Balderton Capital, one of Europe’s leading venture capital firms, integrated card payments and mobile point of sale business, Yoco, concluded a series-A funding round from two foreign investors. A number of our members have attracted global investment attention and some are in advanced discussions which is testament to the quality of our local talent and businesses. Entersekt also received investment from Endeavor Catalyst, an innovative co-investment vehicle designed to support Endeavor Entrepreneurs. The investment marked the Silicon Valley-based fund's first ever in South Africa.
We have seen significant growth in our member base and end the year with 78 businesses across our gold, platinum and diamond tiers and over a thousand green members signed up. Our members are building innovative fintech solutions across financial services with the most popular verticals delivering alternative lending, payments and investment solutions. We have seen a dramatic rise in the insuretech space with a number of our businesses working on pilots and proof of concepts with our portfolio companies. With data becoming the new currency in business, we continue to drive innovation within our Group through our members who are using artificial intelligence and machine learning to develop disruptive solutions in the financial services industry. Platinum member, Isazi has been delivering a number of data-driven solutions for a couple of our portfolio companies. AlphaCode is providing additional support to Isazi by sponsoring the founding team on the rigorous 10xE acceleration programme.
Through our networking events and collaborative co-working space, members have developed meaningful relationships allowing for deeper understanding of each other’s businesses which have led to a number of partnerships and deals between the members.
AlphaCode members have continued to dominate this year, being recognised locally and globally as leaders in fintech. The European Patent Office granted Entersekt patents for two of its foundational technologies; their mobile-based transaction authentication system and the cryptographic processes it uses to identify individual mobile devices and secure communications to and from them.
ThisIsMe, a fintech which enables businesses to reduce fraud, automate KYC checks, improve onboarding and increase revenue, seemed to dominate industry awards walking away with Best African Fintech and Best Banking Innovation awards at the African Fintech Awards.
CommuScore and FinChatBot were chosen and sponsored to attend WebSummit, the largest tech conference in the world. FinChatBot was also selected from 4000 startups to pitch in London at the Startupbootcamp London InsureTech Programme. They follow in the footsteps of Emerge which completed the programme earlier this year. Community driven savings business Nobuntu was accepted into the DFS Lab, on the Gates Foundation financial inclusion initiative and LulaLend was a top 11 finalist in the FNB Business Innovation Awards.
Platinum member, Nthutuko Shezi, founder of Livestock Wealth, who continues to feature as a prominent entrepreneur appeared on a panel with Sir Richard Branson at the launch of Global Entrepreneurship Week as well as being the first prize winner at the SAB Foundation Social Innovation Awards walking away with R1.3 million.
AlphaCode hosted over 25 events during the year. Our events offer a platform for our members to showcase their businesses and establish themselves as thought leaders in their respective fields. From demo days and masterclasses to training and roundtables with our portfolio companies, attendees have been exposed to the latest trends and developments in the financial services industry. We continued to support our partnership with SiMODiSA hosting StartupThursday events and we began collaborating with RMB Foundery with demo events spanning a variety of trending topics including artificial intelligence, the blockchain and how to approach customer-centric design.
We have assisted our members in demystifying the regulatory landscape that can be difficult to navigate through a series of risk and compliance masterclasses facilitated by leading expert John Symington. We collaborated with Norton Rose Fulbright and the Good Law Foundation unpacking fintech regulation in Africa as well as with Webber Wentzel on the discussion of IP exchange control and loop structures. Our members got to participate in a very heated panel discussion looking at the legal and ethical risks of artificial intelligence as well as meet international author, speaker, entrepreneur and professional board director, Carl Bates at a workshop on growing companies through high impact boards.
The AlphaCode team continues to support our local business schools by working with post-graduate students as well as hosting MBA delegations from international business schools.
Our members have access to a host of benefits via the AlphaCode partner network which includes Yodlee, Amazon Web Services, Sw7 and PR services via Turquoise PR. We have sponsored 15 business though pitch clinics to hone their pitching skills to investors and sixteen of our members who have worked with our PR agent Michelle Blumenau, have managed to launch or promote their startups in the media generating millions of rands worth of coverage and vast exposure via digital, print and broadcast channels.
What some of our members have to say
“AlphaCode is without a doubt the premium fintech and startup community in South Africa providing many learning, growth and network opportunities and an environment which adds concrete value to us.” Schalk Nolte, co-founder, Entersekt
"AlphaCode has assisted us in many different ways. They have been great friends with us and have always offered good advice. They invited us to pitch to Bank of America Merill Lynch and we won R1m in 2015. We used this money carefully and showed a 266% return in 8 months. AlphaCode also introduced us to all their partner companies and we have become suppliers to these businesses. In addition, AlphaCode paid for a programme to help scale our business over the next 18 months.” Ashley Anthony, co-founder, Isazi
“AlphaCode has provided us with office space, office infrastructure and PR support which all has massive value. However, the greater value comes from the prestige associated with being part of AlphaCode - the access to Chipo, Paige and Lisa as mentors and access to industry leaders associated with AlphaCode. We’ve also benefited from being around other dynamic entrepreneurs in a similar space, sharing ideas and building relationships and we are particularly grateful for all the help that we have received from the AlphaCode team.” Reka Barole, co-founder, Nobuntu
“AlphaCode has been instrumental in providing a platform for us to access industry thought leaders, networks, working space, coaching, publicity and certainly funding. In a recent VentureBurn survey it was stated that only 7% of entrepreneurs receive over R1million in funding whilst there are 0% female founders in the South African market. It was through AlphaCode that we got the coaching and platform to pitch to global multi-nationals and secure funding that very few startups get to land in their first year. They have been really supportive of our all-female founded FinTech to really participate in the ecosystem locally and globally.” Priya Mistry, co-founder, CommuScore
“Slide is now well on the way to causing significant disruption in the South African fintech sector. We would not have been able to break into the South African market so rapidly without the help provided by AlphaCode." Dr Alon Stern, co-founder, Slide