In early October, Cape Town GetSmarter concluded a $103 million (R1.4 billion) sale to US-based technology firm, 2U, making it one of the most valuable startups in the South Africa’s history.
The deal, which is believed to be the biggest ever for a South African edtech company, was first announced in May, and further bolsters Cape Town’s position as a leading technology hub in the country.
As not all sale prices are reported directly, it is difficult to say exactly how GetSmarter fits in compared to South Africa’s other most valuable start-ups, but it appears that the record still belongs to Mark Shuttleworth’s Thawte which sold for $575 million in 1999.
This is also the closest the country has come to having its own “unicorn” evaluation – a company valued at $1 billion, according to Jason Levin, author of a June report on the state of start-ups in the country.
“The total value of all the tech and innovation startups in Joburg and Cape Town together, is about $1.5 billion: a similar size to Melbourne’s, smaller than Lagos’, and half the size of Sao Paolo’s, said Levin.
He confirmed that Mark Shuttleworth’s Thawte is the start-up that has come the closest (its 1999 price tag of $575 million equates to about $850 million in modern money).
However South Africa has also lost out on start-ups which have chosen to move their business out of the country, said Levin.
“Mimecast, founded by South Africans Peter Bauer and Neil Murray, is a unicorn with a current market cap of $1.2 billion – but was created in 2003, a year after the pair left the country.”
BusinessTech looked at some of the other companies which have come close to this “mythical” evaluation.
Thawte – $575 million (sold in 1999)
While perhaps best known as the first South African in space, Mark Shuttleworth first made headlines for his 1999 sale of online security firm, Thawte, to Verisign for $575 million.
Run from Shuttleworths parent’s garage, Thawte was originally aimed to produce a secure server not fettered by the restrictions on the export of cryptography which had been imposed by the United States.
Using a “web of trust” model, Thawte would issue free email certificates, while the person’s identity was assured by meeting face-to-face with one or more “Thawte Notaries” who needed to see identification and keep a copy of it.
Kapa Biosystems – $445 million (sold in 2015)
Kapa Biosystems, co-founded by Trey Foskett, Paul McEwan, Ron McEwan and Chris McGuinness in 2006, pioneered the use of directed evolution to develop a suite of high-performance reagents for a range of life science applications
Their products are used by thousands of scientists around the world and cited in more than 4,000 peer-reviewed publications.
They are continuing to develop innovative solutions that accelerate genomics research that can impact the future ability to diagnose, monitor and treat cancer and complex inherited and infectious diseases.
Kapa Biosystems was bought by Roche, a Swiss multinational healthcare company, for $445 million in 2015.
GetSmarter – $103 million (sold in 2017)
GetSmarter provides short, competency based online courses to working professionals around the world in collaboration with leading universities.
Founded by brothers Rob and Sam Paddock, 2U entered an agreement to acquire the startup for approximately $103 million, with an earn-out payment of up to $20 million in cash.
It has served more than 50,000 students since inception, with course completion rates averaging 88%.
GetSmarter’s portfolio includes over 70 courses offered with its university partners, and operates under a revenue share model with the universities.
Fundamo – $110 million (sold in 2011)
Fundamo’s platform enables the delivery of mobile financial services to unbanked and under-banked consumers around the world—including person-to-person payment, airtime top-up, bill payment and branchless banking services.
The company’s vision is for a truly connected financial services ecosystem that supports the ubiquity of mobile devices.
Fundamo had some 50 deployments in over 40 countries, including 27 countries in Africa and the Middle East and another 10 globally.
Prior to its sale, Fundamo was privately held by a group of investors in South Africa that included Sanlam, Remgro Limited, and HBD Venture Capital.
Nimbula – $110 million (sold in 2013)
In March 2013, Oracle announced it has agreed to acquire Nimbula, a provider of private cloud infrastructure management software.
Nimbula’s technology helps companies manage infrastructure resources to deliver service, quality and availability, as well as workloads in private and hybrid cloud environments.
It was founded in late 2008 by Chris Pinkham and Willem Van Biljon, who had developed the Amazon Elastic Compute Cloud (EC2).