South African VC firm aims to become African PropTech leader

South African VC firm aims to become African PropTech leader

Exclusive Interview by Neall De Beer:
As PropTech takes shape on the African continent, Venture Capitalists are marrying disruptive tech innovation with capital and solving African problems.

I caught up with Clive Butkow, CEO of Kalon Venture Partners, one of the leading African Venture Capital firms investing in PropTech.

ND: Tell me about Kalon Venture Partners, when and why was it founded?

CB: I founded Kalon Venture Partners about 3.5 years ago and raised capital to invest growth capital into entrepreneurial tech businesses. We have raised circa R125 million with commitments for further capital. I started the business out of my passion for helping entrepreneurs take their early stage companies and building large corporates. Our motto is to make heroes out of entrepreneurs. Kalon Venture Partners is one of South Africa’s first Disruptive Technology Venture Capital Fund incorporated under Section 12 J of income tax act.

ND: Can you give me more information on your background and your role at Kalon

CB: I was the former Chief Operating Officer (COO) of Accenture South Africa. I have 28 years management consulting experience. During my tenure at Accenture (formally Arthur Anderson and Anderson Consulting), I played numerous leadership roles, including Managing Director of Accenture’s Technology business as well as Managing Director of Accenture’s Resources business. During my Accenture tenure I worked around the globe, in the major venture capital ecosystems, helping build technology startups.

I sit on various boards of the Venture Capital’s underlying investee companies including chairman of two of the companies.

My role at Kalon is the CEO and our vision is to become the pre-eminent venture capital company on the African continent investing in entrepreneurs solving African problems. We marry disruptive tech innovation with capital and then help build and exit the investee companies. We are the entrepreneurs behind the entrepreneurs.

ND: What kind of PropTech companies are you currently investing in? Are there any standout investments you have made recently?

CB: We have invested in Flow an early stage PropTech company. During the last 24 months we reviewed a number of PropTech companies and felt they were only automating the current outdated processes. We invested in Flow!

ND: What are the key components you consider when investing?

CB: I am actively involved in the South African tech entrepreneur ecosystem and invest in early-stage startups looking for growth capital. Founders ask me many questions, but there’s one they ask me more often than any other: “how do investors evaluate startups?”

By working directly with over 100 early-stage tech companies across the globe and evaluating hundreds of South African startups looking for investment, I created my 5 T approach for evaluating startups to provide a framework for what investors look for in potential investments.

I’ve begun to identify common misconceptions about the way investors operate and what they’re looking for in potential investments. The 5 T’s of Kalon’s investment strategy include; Team – a strong management team who are the best for this opportunity. Technology – a proven technology with a clearly defined competitive advantage. Traction – post revenue with a referenceable customer base. Target Addressable Market – a large target addressable market, solving real problems in a growing market size (seek 10X returns) and terms – fair terms for both Kalon and the entrepreneur.

ND: What should PropTech startups consider when seeking investment from you?

CB: They have to fundamentally disrupt the current legacy property sector being leases or buying and positively impact the customer experience. They should not be automating current antiquated practices.

ND: Do you see a lot of potential in the African region? And what advice would you give to entrepreneurs seeking investment from VC firms?

CB: Yes, business is about timing and we are seeing the property sector looking for disruptive digital technologies across the continent. Cold calling does not work. Be introduced to your venture capitalist by someone they know, like and trust. Typical South African VC’s invest in growth capital and not in ideas or products. They invest in businesses that are growing double digit month on month and the customers are pulling the product out of the company opposed to the co labyrinth pushing the product into the marketplace.

Clive is a speaker at BWT Africa 11-12 June, Johannesburg, South Africa.

To view the article on Linkedin click here.