THIRD QUARTERLY REVIEW SEP 2016

As highlighted during our investor roadshows, our intention is to distribute a newsletter once a quarter to keep investors advised of developments in the fund.

A reminder that GroTech raised R62 million as at 29th February, 2016. The capital raised was from 65 retail investors as well as Caleo Capital, who invested a significant portion of the capital on behalf of their clients.

GroTech opened their second capital raise in July 2016 which will close at the end of October 2016. GroTech aims to raise an additional R38 million to bring the total capital raised to R100 million.

The annual audited financial statements at 29 February 2016 may be downloaded from this link. The company has only recently commenced capital raising at that date. The Annual General Meeting will be held early in 2017 at which time shareholders will be provided with a review of GroTech’s activities to that date.

Since our last newsletter, GroTech has made good progress on a number of fronts.

CURRENT INVESTMENTS

SMEasy: As communicated in our second quarterly review, GroTech made their first investment in SMEasy (www.smeasy.co.za), an online, easy to use business management and accounting solution for the small business market that has been specifically developed for entrepreneurs who don’t need to understand accounting.

One of South Africa’s major banks has approval to invest and inject further capital into SMEasy. This transaction should be concluded in early October.

SMEasy’s strategic alliance with MTN to “distribute” to their circa 250 million customers in Africa is going live in early October in a number of African countries including Nigeria.

The company is also engaged in discussions with a number of corporates looking to distribute the product through their channels including banks and insurance companies.

CURRENT TERM SHEETS

We have issued a term sheet and are in the process of conducting a due diligence on a technology company operating in the courier industry. This company is disrupting the courier industry by aggregating a number of couriers onto their platform (marketplace) which empowers their customers by providing an instant connection to a national courier network, offering more affordable pricing, time saving and convenience to the consumer.

The company has signed a deal to be the preferred supplier to one of South Africa’s largest promotional goods company. This company delivers circa 50000 parcels per month.

The company has also secured and integrated into eight of the larger courier companies in South Africa with a heathy back log of additional companies requesting to be integrated into the platform.

CURRENT DEAL PIPELINE

I am pleased to report that the GroTech pipeline continues to be full of promise and we are excited as to the future prospects. The investment committee continues to evaluate a number of opportunities which fall within the fund’s disruptive technology investment mandate.

As at the end of September, we have received and evaluated in excess of 200 business plans, met with circa 100 of these entrepreneurs and are conducting due diligences on a number of these companies which we will be taking to our Investment Committee for further consideration.

These companies are disrupting various industries and we believe have potential for growth both locally, Into Africa and globally.

RESOURCES

We are excited to announce that we have hired, Leron Varsha, as COO of the business. With over 20 years of experience as a technology specialist, and a wealth of experience in launching and growing companies, Leron is a welcome addition to the team.

Leron started his career developing websites, managing and supporting networks and learning the ins and outs of all things technology related. Consequently, Leron’s entrepreneurial flair led him to found and run a multitude of companies in the FMCG space, garnering experience in sales and distribution, marketing and branding and overall operational expertise in running a multi-million-rand business. During his tenure of 9 years at the helm of the business Leron negotiated with major multi-national brands and oversaw a turnover of a billion rand. Leron is incredibly passionate about the new world of disruption and is excited about identifying and growing entrepreneurs in the venture capital tech space.

STRATEGIC ALLIANCES

We have formed or are in the process of concluding a number of strategic alliances with capital providers and capital seekers.

One of these alliances is with a global equity crowdfunding company, who has in excess of 100 companies in their portfolio, to co-invest up to 20% of GroTech’s capital raised in their underlying companies. We are very excited about this opportunity as it exposes GroTech to investment opportunities in international technology companies across the globe as well as creates a funnel for GroTech to commercialize many of their globally proven companies, in South Africa and Africa. We will communicate further details once the deal is finalized within the next few weeks.

We also continue to expand our networks with both capital providers and capital seekers across South Africa.

PUBLIC RELATIONS

GroTech continues to receive much exposure in the press and continuing to build our brand to become recognized as “The disruptive technology fund of choice for South African entrepreneurs”.

Two GroTech board members, Gil Oved and Romeo Khumalo, are members of the panel of judges on the soon to be televised local edition of Shark Tank. This has exposed the GroTech board to a number of disruptive digital technology investment opportunities.

We continue with our representation at many of the major entrepreneurial events in both Johannesburg and Cape Town. I will be one of the judges at the Africa Fintech awards where in excess of one hundred Fintech companies will be presenting to an esteemed panel of judges.

Should you require any further information or clarification on this letter, please do not hesitate to contact me.

Kind regards,

Clive Butkow
CEO

Clive Butkow
CEO
GroTech Venture Capital Company
Download Audited Financials – Feb 2016
CURRENT INVESTMENTS
CURRENT TERM SHEETS
CURRENT DEAL PIPELINE
RESOURCES
STRATEGIC ALLIANCES
PUBLIC RELATIONS

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GroTech is a licensed financial services provider

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