In January and April this year, Kalon Venture Partner, a South African-based venture capital firm, led investments in South African cybersecurity startup, Sendmarc. Now, joining Kalon Venture in the investment rounds in Sendmarc is Endeavor South Africa, a non-profit organisation that identifies and supports innovative, high-impact entrepreneurs in emerging markets to scale. Endeavor made the investment through one of its funds, Harvest venture Capital II. 

The investment will boost Sendmarc’s expansion in South Africa and globally.

“We welcome the support and continued commitment of the Kalon team and are really excited to have the Endeavor SA’s Harvest Fund on board not just as strategic investors, but as co-investors too,” says Sendmarc CEO, Sam Hutchinson. “The latest round of funding gives us a great runway to supercharge our growth path both in South Africa and internationally.”

Why Endeavour Invested

On why it invested, Antonia Bothner, Capital Lead at Endeavor said: “Sendmarc is an Endeavor Entrepreneur — one of 28 in the country — and we are delighted to be able to co-invest and support this dynamic team.” 

Following a disciplined, rules-based investment process, Endeavor South Africa, which is part of the bigger Endeavour Catalyst network, invests alongside professional venture capital and growth equity firms into the equity financing rounds of Endeavor Entrepreneurs.

The main rules of investment by Endeavor Catalyst are:

• Investment only in the companies of Endeavor Entrepreneurs — these entrepreneurs have successfully passed Endeavor’s rigorous selection process. For instance, of the 5,000 companies screened by Endeavor Brazil last year, only 12 companies were selected to join the Endeavor network.

• Participation in rounds of at least US$5 million+ in equity capital;

• The round in question needs to be led by a qualified institutional investor.

If these criteria are met, Endeavor Catalyst seeks to invest in up to 10% of the round, with a maximum investment of US$2 million. Endeavor Catalyst portfolio companies continue to receive support services from Endeavor.

In South Africa, Endeavor’s Harvest Fund’s structure is unusual in that it allows for the reinvestment of 20% of carry into the ecosystem. This implies that when firms like Sendmarc succeed, a percentage of the profits will be reinvested in the South African entrepreneurial ecosystem, assisting in the development of the next generation of high-impact entrepreneurs. As a result, the fund’s influence should be multiplicative in the long run. Endeavor South Africa’s portfolio of 28 companies has generated over R2-billion in sales and created over 4,600 jobs in the last two years.

“Having Endeavor on board really validates the problem that Sendmarc is solving and provides the team access to their global network of entrepreneurs and investors” says Clive Butkow the CEO of Kalon Venture Partners.

A Look At What Sendmarc Does

Sendmarc, founded in 2018 by Sam Hutchinson, Sacha Matulovich, and Keith Thompson, provides the setup, deployment, and reporting capability for the DMARC worldwide email protection standard (Domain Message Authentication, Reporting and Conformance). The protocol is intended to provide email owners the ability to safeguard their domains against unauthorized usage, such as impersonation attacks or email spoofing, and to assist scammers from stealing domain names and using them to send phishing emails.

Sendmarc meets a genuine and rising demand by speeding up the installation of DMARC, allowing businesses to defend themselves, as well as their customers and suppliers, from escalating cyber assaults.
Sendmarc has had rapid growth since its inception, processing 400 million emails each month on its platform and rising at a rate of 30% month over month. It has 35 JSE-listed firms as customers, as well as a growing list of clients in the United States, the United Kingdom, Ireland, Germany, and South America.

The firm is on its way to become Africa’s foremost cybersecurity platform, addressing the issues of phishing and spoofing. Its development ambitions include entering and expanding in international markets, as well as continuing to strengthen its position in South Africa.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer