{"id":5256,"date":"2012-02-05T21:08:16","date_gmt":"2012-02-05T21:08:16","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=5256"},"modified":"2012-02-06T10:36:14","modified_gmt":"2012-02-06T10:36:14","slug":"but-are-you-making-money","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/5256\/but-are-you-making-money\/","title":{"rendered":"But are you making money?"},"content":{"rendered":"

South Africa is enjoying a ‘boom period’ for new technology start-ups – with one popping up every other day. Companies with names like Yola, Toodu, Trustfabric, Mobiflock, Woothemes, Snapt and Evly are making headlines in the mainstream media.<\/p>\n

The increased awareness around entrepreneurs in the local technology and Internet arena is helped by institutions like the Silicon Cape initiative, which aims to foster a start-up scene similar to Silicon Valley in the USA.<\/p>\n

High profile success stories, like Visa’s recent acquisition of SA start-up Fundamo for R844 million (US$110 million) – and of course VeriSign’s purchase of Mark Shuttleworth’s Thawte for R3.5 billion ($565 million) – have lent credence to the idea that local tech start-ups can be a great investment.<\/p>\n

Good news for local tech entrepreneurs is that some investors are willing to push millions into start-ups. Many new tech companies are already benefitting from venture capital from firms like World of Avatar, HBD Venture Capital and Reinet Investments.<\/p>\n

This funding not only helps entrepreneurs to set up their businesses, but also helps to develop and train South Africans; drive an entrepreneurial spirit; and develop the local technology market.<\/p>\n

Funding is also an essential ingredient if local start-ups are to compete effectively against their counterparts in places like Silicon Valley where investments of millions of dollars in new start-ups are commonplace.<\/p>\n

Investors and start-ups are, however, not always in it for the warm and fuzzy philanthropic feelings. In fact, it is mostly about the money. You know what I am talking about \u2013 moolah, dough, loot, cash!<\/p>\n

News like FireID’s problems – which after an investment of tens of millions of Rands by Reinet was close to shutting its doors \u2013 understandably makes investors uneasy.<\/p>\n

FireID was saved by an investment from World of Avatar, but it will now have to prove that they can make money and show a return on investment.<\/p>\n

And this is one of the big questions which both investors and observers want to know: are you making money – or are you set to make money in future?<\/p>\n

MyBroadband BusinessTech asked a few high-profile technology and Internet startups whether they are making money.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/strong><\/td>\nQuestion<\/strong><\/td>\nAnswer<\/strong><\/td>\n<\/tr>\n
Yola<\/strong><\/td>\nAbout<\/td>\nYola was founded in 2007 (as Synthasite) by Vinny Lingham.\u00a0Yola makes it easy for people to build and host their own website.<\/td>\n<\/tr>\n
\n

Investment<\/td>\n$25 million<\/strong> in funding from Johann Rupert’s Reinet Fund<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from Yola<\/td>\n<\/tr>\n
Number of employees?<\/td>\n80: <\/strong>“42 staff members in Cape Town and the rest in San Francisco and abroad”<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer<\/strong> from Yola<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Wantitall<\/strong><\/td>\nAbout<\/td>\nWantitall was founded in 2006 by Justin Drennan.\u00a0 Wantitall offers an ecommerce service with more than 14 million products.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes:<\/strong> “Business was initially self funded. Once profitable, we went looking for investment to help grow the business”<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
Number of employees?<\/td>\n20<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nYes: <\/strong>“This includes paying market related salaries to the founders\/directors”<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
ARC Telecoms<\/strong><\/td>\nAbout<\/td>\nARC Telecoms was founded in 2010 by Steve Briggs, Michele McCann and Paven Chetty. ARC Telecoms\u00a0is an IP telecommunications service provider dedicated to the small and medium business sector.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes: <\/strong>World of Avatar<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from ARC Telecoms<\/td>\n<\/tr>\n
Number of employees?<\/td>\n30<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer <\/strong>from ARC Telecoms<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
The Daily Maverick<\/strong><\/td>\nAbout<\/td>\nThe Daily Maverick, a news website, was founded by Branko Brkic in 2009. The company launched its iPad publication iMaverick in 2011.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes:<\/strong> World of Avatar<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nYes:<\/strong> “We launched our daily publication iMaverick just 4 months ago, which means we have had to invest a lot of money into the venture and we are looking at a 2 year pay back period”<\/td>\n<\/tr>\n
Number of employees?<\/td>\n18:<\/strong> “Before iMaverick we had 8 full time journos, and now we have 18 in order to produce iMaverick”<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
TrustFabric<\/strong><\/td>\nAbout<\/td>\nTrustfabric was founded by Joe Botha in 2010. The company aims to facilitate smarter relationships between businesses and individuals.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes:<\/strong> World of Avatar<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from Trustfabric<\/td>\n<\/tr>\n
Number of employees?<\/td>\nNo answer<\/strong> from Trustfabric<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo answer<\/strong> from Trustfabric<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer<\/strong> from Trustfabric<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Localsort<\/strong><\/td>\nAbout<\/td>\nLocalSort was founded by Marcel van de Ghinste, Jonathan Womersley, Justin Womersley and David McLennan in 2011. LocalSort helps tourism businesses to connect with each other.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes:<\/strong> $50,000 from Google and 5 angel investors<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nYes:<\/strong> “We are still testing and building out the initial product before we scale up”<\/td>\n<\/tr>\n
Number of employees?<\/td>\n7: <\/strong>“There are currently seven of us employed by the business, all of whom are paid out of our current funding”.<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo:<\/strong> “We have a strong revenue model, but it relies on a thriving marketplace. We’re still building out that marketplace.”<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Cable & Grain<\/strong><\/td>\nAbout<\/td>\nCable and Grain was founded by Erik Brits. It is an electronics company devoted to creating premium quality, functional art<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes:<\/strong> “Once the ball was rolling, a significant lump sum investment was made by a family member”<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nYes:<\/strong> “To produce a profitable margin on products, the direct importing of electronic components was necessary, and this can only be done in volume”<\/td>\n<\/tr>\n
Number of employees?<\/td>\nOnly the founders<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo:<\/strong> “We are almost finished with the business mechanics, and then will begin marketing and sales”<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Zoopy<\/strong><\/td>\nAbout<\/td>\nZoopy was started in 2007 by Jason Elk, Gerry da Silva and Pat Elk. Zoopy was started as a YouTube competitor, but has evolved into a mobile video tabloid news website.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes: <\/strong>“Between the three founders, we bootstrapped the business for a year before receiving investment from Vodacom in 2008”<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from Zoopy<\/td>\n<\/tr>\n
Number of employees?<\/td>\n15<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes:<\/strong> “We generate revenue every month via various revenue models. I can’t disclose any more about the details or nature of our finances.”<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer<\/strong> from Zoopy<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Mobiflock<\/strong><\/td>\nAbout<\/td>\nMobiflock was founded by Patrick Lawson in 2010. Mobiflock makes cell phones safe for children.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nOnly later:<\/strong> “Mobiflock started as a new venture between three existing entrepreneurs and it was built just using free time whenever possible at the start of the project.”<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nYes:<\/strong> “After we had prototyped our idea and demonstrated a need we realised in order to grow dramatically we would need investment to hire the key staff required to grow.”<\/td>\n<\/tr>\n
Number of employees?<\/td>\n5: <\/strong>“They are all paid out of investment funds at this stage.”<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Toodu<\/strong><\/td>\nAbout<\/td>\nToodu was founded in 2011 by Lee Hartman. Toodu is a service that matches items on your to do list with people and businesses who can help you get things done.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes: <\/strong>“The business was seeded by the founders and then raised VC funding later”<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Number of employees?<\/td>\n7<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nNo:<\/strong> “Toodu is an ambitious play with a long runway and our VC partners understand that.”<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Evly<\/strong><\/td>\nAbout<\/td>\nEvly was launched in 2010 Eric Eidelstein and Eran Eyal. Evly is a crowdsourcing collaboration platform.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from Evly<\/td>\n<\/tr>\n
Number of employees?<\/td>\n9<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer:<\/strong> “As a private company, we’re not disclosing our revenue numbers<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
FSMS<\/strong><\/td>\nAbout<\/td>\nFSMS was founded by Daniel Schwartzkopff in 2010. FSMS provides free SMS services.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes:<\/strong> World of Avatar<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from FSMS<\/td>\n<\/tr>\n
Number of employees?<\/td>\nNo answer<\/strong> from FSMS<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo answer<\/strong> from FSMS<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer<\/strong> from FSMS<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Motribe<\/strong><\/td>\nAbout<\/td>\nMotribe was founded by Nic Haralambous and Vincent Maher in 2010. Motribe enables users to build and manage their own mobile social communities<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes: <\/strong>4Di Capital<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from Motribe<\/td>\n<\/tr>\n
Number of employees?<\/td>\nNo answer<\/strong> from Motribe<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo answer<\/strong> from Motribe<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer<\/strong> from Motribe<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Snapt-UI<\/strong><\/td>\nAbout<\/td>\nSnapt-UI was founded by Dave Blakey. Snapt-UI builds enterprise grade management front-ends for open source server software.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes: <\/strong>4Di Capital<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from Snapt-UI because of the company’s “agreement with 4Di”<\/td>\n<\/tr>\n
Number of employees?<\/td>\nNo answer<\/strong> from Snapt-UI<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo answer<\/strong> from Snapt-UI<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer<\/strong> from Snapt-UI<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Cerebra<\/strong><\/td>\nAbout<\/td>\nCerebra was founded by Mike Stopforth in 2006. Cerebra is a social and mobile media company.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nNo:<\/strong> “We were fortunate enough (as an IP business) to experience organic growth from day one”<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo:<\/strong> “The business is entirely self-funded”<\/td>\n<\/tr>\n
Number of employees?<\/td>\n28<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes<\/strong><\/td>\n<\/tr>\n
Profitable?<\/td>\nYes:<\/strong> “We have grown significantly in revenue and operating profit every year since inception”<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Firestring<\/strong><\/td>\nAbout<\/td>\nFirestring was founded by Alison Jacobson in 2009. Firestring helps enterprises to create social networks within organisations, specific sectors and closed special interest groups.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nNo answer<\/strong> from Firestring<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo answer<\/strong> from Firestring<\/td>\n<\/tr>\n
Number of employees?<\/td>\nNo answer<\/strong> from Firestring<\/td>\n<\/tr>\n
Generating revenue?<\/td>\nNo answer<\/strong> from Firestring<\/td>\n<\/tr>\n
Profitable?<\/td>\nNo answer<\/strong> from Firestring<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
WooThemes<\/strong><\/td>\nAbout<\/td>\nWooThemes was founded by Adriaan “Adii” Pienaar. WooThemes designs and sells premium themes for WordPress.<\/td>\n<\/tr>\n
\n

Investment<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nNo<\/strong><\/td>\n<\/tr>\n
Number of employees?<\/td>\n17<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes: <\/strong>“WooThemes is a a multi-million dollar revenue business”<\/td>\n<\/tr>\n
Profitable?<\/td>\nYes: <\/strong>“We had revenues (and thus profits) immediately after launch, which meant we didn’t need to figure out a way in which we would fund the growth of the business.”<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Cognician<\/strong><\/td>\nAbout<\/td>\nCognician was founded by Patrick Kayton and Barry Kayton. Cognician gives users direct and immediate access to cognitive guidance<\/td>\n<\/tr>\n
\n

Investment<\/td>\nYes: <\/strong>“We’ve had a number of investors come on board”<\/td>\n<\/tr>\n
Relying on investments to operate?<\/td>\nYes: <\/strong>“We’re partially funded and partially income-supported.”<\/td>\n<\/tr>\n
Number of employees?<\/td>\n9<\/strong><\/td>\n<\/tr>\n
Generating revenue?<\/td>\nYes:\u00a0<\/strong>Cognician prefers to keep exact revenue figures confidential, but we can confirm that they have generated revenue.<\/td>\n<\/tr>\n
Profitable?<\/td>\nClose:<\/strong> “We’re close to being profitable, but cash flow remains tough in the drive to expand and grow the business”<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n","protected":false},"excerpt":{"rendered":"

South Africa is enjoying a boom in technology and Internet startups. We ask them the question which you want to know: Are you making money?<\/p>\n","protected":false},"author":2,"featured_media":5442,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1281,1289,1288,1260,1286,1278,1283,1267,1277,1276,1268,1275,1287,1279,26,1270,1261,1265,1257,1266,1273,1263,1264,1258,1285,1271,413,1282,1272,417,411,1284,1259,1274,1262,1255,1256,1290,1280,1254,1269],"class_list":["post-5256","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending","tag-4di-capital","tag-adriaan-pienaar","tag-alison-jacobson","tag-branko-brkic","tag-cerebra","tag-daniel-schwartzkopff","tag-dave-blakey","tag-david-mclennan","tag-eran-eyal","tag-eric-eidelstein","tag-erik-brits","tag-evly","tag-firestring","tag-fsms","tag-headline","tag-jason-elk","tag-joe-botha","tag-jonathan-womersley","tag-justin-drennan","tag-justin-womersley","tag-lee-hartman","tag-localsort","tag-marcel-van-de-ghinste","tag-matthew-austin","tag-mike-stopforth","tag-mobiflock","tag-neology","tag-nic-haralambous","tag-patrick-lawson","tag-regardt-van-de-vyver","tag-roelf-diedericks","tag-snapt-ui","tag-the-daily-maverick","tag-toodu","tag-trustfabric","tag-vinny-lingham","tag-wantitall","tag-woothemes","tag-world-of-avatar","tag-yola","tag-zoopy"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/5256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=5256"}],"version-history":[{"count":22,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/5256\/revisions"}],"predecessor-version":[{"id":5258,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/5256\/revisions\/5258"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/5442"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=5256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=5256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=5256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}