The former chief executive officer of First National Bank (FNB), Michael Jordaan, has expressed his disappointment at Mxit’s commercial closure.
Mxit announced on Friday that it is shutting down its commercial operations and donating all of its intellectual property and technology assets to independent public benefit organisation ‘The Reach Trust’.
The business further announced that Jordaan, who has been Mxit chair for the past two years, will not actively be involved with the operations of The Reach Trust.
Fin24 reached out to Jordaan for his comment on Mxit’s commercial closure.
“Disappointed but also happy that it can help free education in SA,” Jordaan told Fin24 in an email response.
The Reach Trust, which is taking over Mxit’s technology, has been providing free services such as text-based counselling and education initiatives to up to 10 million people since 2012.
‘Mxit could have been WhatsApp’
In a statement on Friday, Mxit said its monthly active user base in South Africa was just 1.2 million users in July 2015.
WhatsApp has over 10 million users in SA while Facebook has 13 million users in the country, according to recent research from World Wide Worx and Fuseware.
Jordaan told Fin24 that Mxit’s shrinking user base could be attributed to “customers switching to WhatsApp when they upgraded from feature phones to smartphones” and Mxit taking too long to adapt to smartphones. Mxit was launched in 2005 on feature phones.
Jordaan further told Fin24 that Mxit “could have been WhatsApp if it had acted two years faster”.
Jordaan became chair of Mxit after the social network’s former CEO, Alan Knott-Craig jnr, stepped down in late 2012.
Jordaan also heads up Montegray Capital, which is his startup investment vehicle.
He told Fin24 that he has invested in 15 startups, with Mxit not being one of them. He also said that he’s involved in another five startups.
“Most exciting tech development is ability for prices to drop in many industries and in some cases even become free,” Jordaan said.
He further provided advice to budding startups in South Africa in light of what’s happened to Mxit.
“Smartphones change everything. Make them a key part of your strategy, regardless of industry,” Jordaan said.