Seed Engine, a South African start-up business accelerator, has launched its second program where participants are able to pitch their start-up ideas to venture capitalists and private equity firms.
The investment engine has already selected six start-ups which will benefit from a R100,000 cash injection, along with over R300,000 in additional benefits including coaching, mentoring and support to grow their concept into a business.
Seed Engine CEO, Marc Elias said: “We take a 20% stake in each business so we are invested in the outcome. Interestingly the average valuation of each of the ventures at the start of the journey is R500,000. At Demo Day where they pitch their ideas to potential investors, the average is around R3 million – a substantial increase in a very short time.”
At the demo day, which takes place on 27 November 2013, ventures pitch potential investors including angels, venture capitalists, private equity firms, corporates and government so that they can attract further funding.
Seed Engine said it selected six ventures for its first 12 week accelerator boot camp from more than 300 applications. These ventures are currently in negotiations.
“In South Africa, it takes between six and nine months for venture capital; however, the angel investment cycle tends to be shorter,” Elias said.
He noted that first program ventures, Zehoo.me, Cirqls.com and ChowHub made it into the top 40 Start-ups in Africa at the Angel Fair.
The new ventures earmarked by Seed Engine include:
- Stockshop.co.za – an online portal that bridges the gap between stock market product and service providers and those that want to invest.
- Puntr has developed a real time, social, sports prediction game, in the form of an app for mobile devices that sports fans can play against their mates, while they watch live sport on TV.
- 1heart.co.za streamlines communication in emergency situations and allows people to help save the lives of others.
- Autodek.co.za – a web based online marketing and management system serving the auto retail sector.
- Colormeclever creates educational apps for kids.
- Fifty2.com is an academic organising platform for students and lecturers.
Seed Engine has received seed capital from Absa, while strategic partnerships are in place with both local and international early stage venture capital firms including Grovest, and U-Start.
Redwood Capital has provided funding to develop the innovative workspace and is involved in the mentoring of entrepreneurs during the activation process.
The accelerator also has backing and support from tech and other companies looking to boost start-up culture and employment in South Africa.
These include, Microsoft; ITEC; business advisors, PKF; coaching and leadership facilitation company, Urban Everest; and private property and construction company, Tiber.