Kalon Venture Partners Invests in i-Pay, Instant EFT Service Provider

Kalon Venture Partners is pleased to announce its recent investment in a leading payment service provider, i-Pay. The investment was exclusively announced to our shareholders at our Annual General Meeting held on Wednesday. This deal is our third investment in 4 months and is a further example of the unbelievable deal flow we are currently seeing.

The conclusion of this deal will foster a rapid up-scale and expansion of the i-Pay business, which facilitates bank-to-bank automated and instant electronic funds transfers (EFTs) in a matter of seconds. i-Pay will use the funds to continue its plans to market its product and service offering into multiple countries across the globe.

Kalon’s chief executive officer, Clive Butkow says globally there has been a strong uptick in VC investment in fintech companies and this is true in the South African context. “Globally, many traditional ways of doing banking are being challenged and i-Pay is a true innovator in this space – in our view the company is at least 10 times better than any other EFT company we’ve seen. We are delighted to have concluded this transaction and are looking forward to seeing the firm’s potential realised.”

The i-Pay instant payment system was launched in November 2014 by three founders, namely, Thomas Pays, Mitchan Adams and Lyle Eckstein, who had identified a need for an efficient and secure online payment system in the local market.  Pays commented that “As innovators, we have consistently been passionate about developing cutting edge products and services that will both disrupt and benefit the local populace.  In this regard, we realised there had to be a more frictionless and safer way of facilitating online payments.”

Thomas Pays, i-Pay CEO, announcing the investment to Kalon Shareholders

Pays further explained the development of the i-Pay payment system within the EFT payment space in South Africa: “While we viewed EFTs as a much safer payment mechanism for consumers, the main drawback with EFTs was the lengthy and inefficient process that needed to be undertaken in making a payment. We decided to develop the concept of automated bank-to-bank transfers and our goal was for this to happen within a few seconds, thus removing the administrative burden often faced by consumers when effecting an EFT manually. In addition, with cyber security being of utmost importance, the method of payment through i-Pay mitigates the risks which would normally be prevalent when initiating the traditional payment processes. As with most fresh, innovative developments, we were met with some hurdles and opposition along the inventive journey, however, through perseverance (and simple stubborn determination!) our team has produced an ingenious software that has proven to be marketable as a leading payment mechanism in the global space.  The investment of Kalon Venture Partners thus has the positive effect of accelerating i-Pay’s expansion into key markets across the globe.”

‘Serial entrepreneur’ Pays has a track record of founding successful start-ups, including Just Perfect Digital, and Smokoo. He says a recent Jumia trend report for Africa puts mobile penetration at 80 percent for the continent’s population. Internet penetration is at 18 percent with 216 million internet users. By contrast, less than 5% of the population on the continent has a credit card.  As a consequence, and as stated by Pays, “the sky is truly the limit for i-Pay” as i-Pay’s EFT payment mechanism continues to gain rapid traction in SMS and other mobile-friendly applications.”

Butkow says i-Pay easily satisfied the venture capital firm’s investment criteria. “We look for a strong, local team with a proven track record, exceptional disruptive technology, and the ability to springboard local success into the international arena. We conducted a rigorous due diligence and are excited to have concluded this deal.”