April Quarterly Update

Dear Shareholders,

Looking back on an exciting start to 2018, where we have achieved a number of key milestones, which I would like to share with you.

Firstly, the Kalon share price, as at the end of February, 2018, was re-valued from R1000 per share to R1100 per share. We also closed our capital raising round at the end of February, 2018 and I wanted to take this opportunity to welcome our 52 new investors into the Kalon Venture Partners community. I also want to thank those existing investors who have shown continued support of our vision by re-investing in our fund.

We continue to make progress on a number of fronts including; deal flow; investments; partnerships and Strategic Alliances and many more.

Deal Flow

We continue to be seen as one of the pre-eminent Venture Capital investors of choice. We are receiving and analyzing a number of exciting deal opportunities on a weekly basis. One of these opportunities is a company that is disrupting the Insurance industry. This deal will be a joint investment with two other local and global Tech Venture Capital companies. We are in the closing stages of negotiating the term sheet and will hopefully be in a position to announce the investment in the foreseeable future.

Apart from this eagerly anticipated announcement, we are in the term sheet discussion stage with two other companies. Firstly, a well-established company within the travel industry, with the second destined to change the way we do KYC and FICA in South Africa and across the globe.
We are also in early stage discussions with numerous other entrepreneurs.

Investments

As you are aware Kalon made three investments during the last 6 months of the calendar year. These being, SnapnSave, The Sun Exchange and i-Pay.

SNAPNSAVE

Cashback coupons company SnapnSave has shown good growth since Kalon and The Smollan Group co-invested in July 2017. During this period gross revenues have grown 235%, sales are significantly up and the number of coupons redeemed are up 189%. The company has also closed deals with a number of new clients including; Lancewood, Beiersdorf and many more.

SnapnSave also concluded a partnership with Momentum to promote coupons to their Multiply loyalty clients. The partnership will commence with a pilot roll-out to an initial 10 000 clients. If successful, the plan is to rollout to the broader Multiply base of many hundreds of thousands of clients during the latter half of the year.

i-PAY

Kalon’s latest Investment, i-Pay, an instant EFT Payments solution has been achieving rapid growth. During their 2017 financial year end which closed in February 2018 they grew revenue 237%, grew the number of transactions by 160% and payments processed through their large base of clients grew 231%.

i-Pay closed a number of new clients within the last few months including; Peermont, Travelstart and Facebook. They also went live at the POS in store at HiFi Corporation.  They plan to be live in Namibia by the end of May with an existing card partner.

i-Pay is currently in discussions to expand into a number of African countries as well as into Europe. To finance their global expansion, i-Pay are raising capital and currently evaluating a number of international and local Term Sheets to find an appropriate “smart” capital provider. This capital raise will be at a higher pre-money valuation than Kalon’s investment in November 2017.

i-Pay also made headlines and have been selected to join Endeavor‘s Entrepreneurs global programme at the 77th International Selection Panel (“ISP”) in Dubai. The three i-Pay pioneers, Thomas Pays, Mitchan Adams, and Lyle Eckstein are part of 22 entrepreneurs from eight countries to have been selected at the event which was held late last month.

The ISP is the culmination of a rigorous multi-step selection process to identify innovative and driven entrepreneurs who are committed to advancing an ecosystem of entrepreneurship. During the selection event, panelists from around the world interview the candidates about their businesses, with particular focus on potential for high-impact growth.

Endeavour Entrepreneurs gain access to customised services that include access to local and international business mentors as well as volunteers from Fortune 500 consulting firms who assist the founders to open new distribution channels across the globe.

THE SUN EXCHANGE

The Sun Exchange runs a blockchain-based solar micro-leasing marketplace to facilitate financing for small commercial and industrial solar projects in South Africa and other developing regions. There are two key sides to the business. Firstly, it allows people to buy solar panels (using Bitcoin or fiat currency) from as little as R100 up to hundreds of thousands of Rands and then lease these panels out to small businesses. Earnings can then be cashed out in Bitcoin or even Rands. On the other side, businesses can lease these solar units without having to put down the large amounts of capital required for installation and purchase, resulting in dramatically lower energy costs.

To date, The Sun Exchange has provided financing for four solar projects throughout South Africa, which are now fully operational. The crowdsale for its fifth project, which will provide power for environmental NGO South South North, recently sold out in two weeks.

To hear a recent interview by The Sun Exchanges CEO, Abraham Cambridge, please click here.

The Sun Exchange have recently opened their ICO with the public pre-sale of their token, the SUNEX. SUNEX facilitates the use of the world’s first solar project insurance fund for emerging markets & unlocks bonuses, discounts and priority access on www.thesunexchange.com, the global solar panel sharing market place. To view the SUNEX whitepaper, please click here.

Sun Exchange is now pre-selling the SUNEX token to:

  • Expand their team, further develop tech infrastructure and boost global operational scalability;
  • Seed the world’s first dedicated insurance fund for solar projects in emerging markets;
  • Expand their subscriber base and brand presence;
  • Establish a third regional hub outside of Cape Town and Dubai;
  • Pre-finance (pre-build) a set of PV rooftop projects for premium crowd-refinancing; and
  • Execute pilot projects with rural cellular towers, mega crypto-mining rigs, rural and peri-urban village micro-grids, and cold storage/pack houses for small holder farming co-operatives.

Partnerships and Strategic Alliances

We have made significant progress with the forming of Strategic Alliances with many constituents in the ecosystem including; other Capital Providers; distribution relationships with numerous corporates; distribution relationships with global companies and various other value-added alliances. We are excited about these relationships as they will help scale our investee businesses both locally and globally with capital and customers.

In Conclusion

For our new and existing investors, on behalf of the entire Kalon Venture Partners team, we thank you for your support as we continue to strive to invest in the best entrepreneurial talent South Africa has to offer while supporting the development of South Africa’s economy and the resulting job creation and positive change.

Clive Butkow
Kalon Venture Partners  – CEO