Uprise.Africa - Afrikan Heroes

Troubled South African Airline SAX Employees Want To Use Crowdfunding Platform Uprise.Africa To Save The Airline From Death

August 4, 2020

In a novel, de-risked funding strategy, a group of South African Express employees have engaged an equity funding platform, Uprise.Africa, to assist in raising the capital needed to save SA Express.

*Tabassum Qadir, the CEO of Uprise.Africa*

“Liquidating SAX translates into slicing through the very artery that feeds the minor towns and cities in SA, and closing the gateway to our more rural areas,” said SAX spokesperson Michael Hlatshwayo in a statement.

“One of the major factors in improving our economy, would be to stimulate internal travel by South Africans taking ‘sho’t lefts’ through the country. Without a skilled carrier such as SAX, this becomes difficult for many everyday South Africans.”

Here Is What You Need To Know

The group strongly believes that SA Express (SAX) is a national asset that should be salvaged and definitely not liquidated. They further believe that the company is a viable business and if rescued with the correct strategy, could be a very profitable one.
In addition to the loss of access to cities and towns, liquidating SAX will have a massive detrimental effect on the staff, says the statement. SAX directly employs skilled and moderately skilled South Africans. 60% of these citizens are in the minor cities, providing jobs, livelihoods and a vital economic lifeline to thousands of people in the cities. 30% of the staff complement come from the rural areas where skills are severely underdeveloped, but with the assistance from companies such as SAX, skills could be recognized and developed.

“The airlines internal financial troubles stem from political interference in its operations, nepotism, poor controls and poor management, exacerbated by external challenges – we can change this! “added Michael Hlatshwayo
“SAX’s fundamental business models are sound with small, cost-efficient aircraft, under-serviced destinations and exclusive, high-value routes. The execution of a revised business model and right-sized operation, by competent management, free of political interference, will return the airline to profitability.”

“A ‘survival mode’,” is important for them to emerge with stronger mindset to shape their future vision with a new perspective and lay the foundation for implementing this new approach. It takes a lot of hard work to publicize your offering and attract potential investors,” says Tabassum Qadir, the CEO of Uprise.Africa,

Historical VC Investments in South Africa (2009–2018) — Source: the latest Southern African Venture Capital and Private Equity Association’s (Savca) Venture Capital Industry Survey

The Increasing Role Of Crowdfunding

2019 was significant for South African startups, with Intergreatme and Beerhouse raising substantial sums from Uprise.Africa, a crowdfunding platform in record-breaking deals. Through equity crowdfunding, Uprise.Africa empowers entrepreneurs to raise between R3 million and R250 million in exchange for equity shares.

Crowdfunding refers to raising money from the public (who collectively form the “crowd”) primarily through online forums and social media. At a time when most African countries are yet to open their doors up to crowdfunding, South Africa is increasing the chances of startups raising capital through this means. Enabled by the friendly legal framework on crowdfunding in South Africa, Africa’s first equity crowdfunding, Uprise.Africa, and South African alternative exchange ZAR X recently entered into an agreement that will see the mini stock exchange list any up-and-coming entities, which have already successfully raised capital via crowdfunding, and freely trade their shares on the open market.

Not only could the arrangement be the funding gap filler that fledgling South African entrepreneurs desperately seek, but it could bring the local capital market to the people. The partnership also solves the fundamental flaw of all other pre-IPO models, namely that once a company has issued the shares they remain fairly illiquid, with investors having their funds tied up until that company looks at going public.

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

Startups In South Africa Which Crowdfund Will Now Be Listed On Stock Exchanges

July 25, 2019

Indeed, this could be ground-breaking. No more waiting for years and centuries for startup IPOs to happen. With this new deal, once startups raise funds through equity crowdfunding in South Africa, the startups’ shares automatically become tradable on the floors of South Africa’s Stock Exchange. Money more here!

Here Is How Everything Is Going To Happen

Today, Africa’s first equity crowdfunding, Uprise.Africa, and South African alternative exchange ZAR X have come to an agreement that will see the mini stock exchange list any up-and-coming entities, which have already successfully raised capital via crowdfunding, and freely trade their shares on the open market.
Not only could the arrangement be the funding gap filler that fledgling South African entrepreneurs desperately seek, but it could bring the local capital market to the people.
The partnership also solves the fundamental flaw of all other pre-IPO models, Nel says, namely that once a company has issued the shares they remain fairly illiquid, with investors having their funds tied up until that company looks at going public.
Tabassum Qadir, co-founder, and CEO of Uprise.Africa says they plan to conclude at least three deals a month.

“We are simplifying venture capital through this mutually beneficial partnership for both entrepreneurs and investors,” says Qadir

“It means, when you have a business idea, you can leverage the Uprise.Africa platform to potentially raise capital quickly and ultimately list on a licensed stock exchange, making the shares tradable,” she says.

Etienne Nel, CEO of ZAR X, agrees that equity crowdfunding democratizes start-up financing by enabling entrepreneurs to raise additional capital, but also allows more people to invest in local businesses and in listed equity.

“Furthermore, it gives crowdfunding investors liquidity in their investments, which ultimately drives financial inclusion and job creation,’ he adds.

He says it gives this new generation of investors the same opportunities as high-net individuals and institutional investors, who can afford the investment costs of larger stock exchanges.
Not only are lower minimum investment amounts possible, but certain transaction fees and regulatory costs also don’t apply.
For example, the alternative exchange community is not subject to the Financial Services Conduct Authority (FSCA) protection levy and doesn’t charge for the custody of funds.

“It is also no secret that the ‘incumbent’ is more focused on institutional money that the interests of retail investors,” Nel says.

Equity crowdfunding is gaining much popularity across the globe, and it doesn’t look like it will slow down soon.

The World Bank, for instance, estimates that the global equity crowdfunding sector will be worth more than $93-billion by 2020.

Upraise.Africa is also putting the funding model on the map. It made headlines recently by facilitating a R34-million capital raising exercise for Intergreatme — a business that describes itself as a “platform that provides users with a secure, simple and effective way to share personal information with anyone”.

Qadir says the platform enables the trust to be built between investors and entrepreneurs and in doing so creates a supportive business ecosystem.

“And now crowdfunding investors can trade their holdings on the ZAR X platform,” she says.

“We have cracked the code. We have now derisked the proposal. We give investors the option to exit by allowing them to sell their shares at will. Usually, and in the current format, investors are tied up in an equity crowdfunding investment for between 6–8 years.

“We also aim to disrupt the country’s traditional funding landscape,” she adds, “which is rather limited and restrictive at that.”

As the IPO model certainly remains very viable for certain businesses of size wishing to launch into the public markets, it is not for everyone.

After these stock exchanges, the next biggest stock market in Africa is Mauritius, followed by Tunisia and Namibia.

Business Maverick had reported recently that it is a capital-raising method on the decline, and Nel says that they “are simply seeing more opportunities for investors and founders looking for methods that better fit their needs than what the traditional incumbents are offering”.

“The compliance costs of being listed on the bigger boards are devastating, and private money and smaller enterprises just find some of the disclosure requirements too cumbersome and restrictive,” he adds.

The Financial Sector Conduct Authority,(FSCA), (the South African market conduct regulator of financial institutions that provide financial products and financial services, financial institutions that are licensed in terms of a financial sector law, including banks, insurers, retirement funds and administrators, and market infrastructures) is still in the process of finalising regulations pertaining to crowdfunding, after releasing its draft proposals in mid-2017. The lack of regulation has been cited by some in the sector as the reason why equity crowdfunding has not taken off in South Africa as it has in more advanced economies.

But ZAR X and Uprise.Africa thinks their deal could be the catalyst needed to kick-start it all.

The World Bank believes the potential market for crowdfunding is significant.

It estimates in its report: Crowdfunding’s Potential for the Developing World that there are up to 344 million households in the developing world able to make small crowdfund investments in community businesses.

“These households have an income of at least $10,000 a year, and at least three months of savings or three months savings in equity holdings. Together, they have the ability to deploy up to $96-billion a year by 2025 in crowdfunding investments,’’ the report noted.

South Africa’s ZAR X Is Not As Small As You Think

ZAR X, one of South Africa’s newest stock exchanges, was granted an operational license in 2016 to operate by the Financial Services Board (FSB). ZAR X commenced operations on Monday, 5 September 2016.

Etienne Nel, ZAR X CEO, says the approval signifies a new era in tech-friendly and user-focused share trading. He said:

“ZAR X creates choice and offers corporate South Africa and the public at large a new opportunity to reduce unnecessary red tape, speed up transaction times and open up equity-based wealth creation to sectors of the South African population that for far too long have been largely excluded from full participation in the financial markets.”

ZAR X listings requirements are largely principles-based, enabling the process of a more flexible and efficient listing. ZAR X will initially offer a primary board for conventional company listings, an investment entities board that will cater for structured products and exchange-traded funds, and a ‘restricted market’ for BBBEE shares, Agri shares and other restricted securities which can only be traded within a clearly defined investor base.

Senwes and Senwesbel were the first companies to list on the Exchange commencing trading on Monday, 3 October 2016.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

How South Africa’s Intergreatme Raised Over $2 Million Through Equity Crowdfunding

June 10, 2019

Looking to raise capital for your startup through equity crowdfunding? No loans? Just some hard currency from some money messiahs? That is what South African businesses are turning to now. Intergreatme has recently succeeded in raising over R32.7 million ($2.2 million) by simply putting up an online request for equity funding on Uprise.Africa and getting overwhelmed by public contributions. This was a big moment for the startup looking to help ordinary people get rid of the daily pain associated with submitting forms and documents through an innovative technology platform.

The startup was founded by a team of young South Africans three years ago and is now valued at about R120m. The team envisions a world where personal data can easily and securely be shared among a host of applications. As long as an activity requires a person’s information, Intergreatme sees a market.

How The Startup Scaled The Hurdles and Raised The Funds

Narrating how the startup raised the funds through equity crowdfunding, Intertreatme CEO said in a recent interview:

We had no idea how successful it was going to be. We thought it was going to be like a 60 day campaign of climbing Mount Kilimanjaro. We needed to get 250,000 that day and we hoped to just do some cold calls. I printed out my full contact list on my phone and my whatsapp list, my email list, and we thought it’s going to be a campaign. But we had no idea that the demand was more than that. We thought that we could raise the 24 million and we thought that we were going to procure a common amount ever.

For startups looking to use crowdfunding to raise capital, he says they are not just going to put a pretty video online and hope people come and invest. They need to do the hard job behind the scenes.

‘‘There are billions and trillions of dollars of money waiting to be deployed,’’ he says. ‘‘People get paid money to invest money. But your business fundamentally needs to be right. Your team needs to be right. What you plan to do needs to be right. So do those things right. And then you can just sample your user base. Just run a poll on Facebook or Instagram or Twitter, just saying, ‘‘Hey, if we rank car, would you invest? And if so, how much will you? You’ll get, you will get an answer. I don’t think you need to do a lot of work to get those answers.

On the pattern of investing, he said about 402 people turned up and contributed to the startup through equity crowdfunding.

We had minimum commitment of 1000 rand and a maximum commitment of 5 million. We had about five, five millions. Wow. We had a couple of millions. It was so cool. We didn’t expect it. And it was just people. We started by saying, if you’ve used our technology before and you sure that you had the wow moment, would you like to invest in this? Tick this box, if you want. But ultimately they, they invested in us as people.

Before that, we had a very successful launch party, which I think was key to the fundraising, where we had a private donation from our whatsapp list. This was two weeks before that. And we’ve got about 120 investors there. And then we had about 250 people at our launch party when the startup was first started. We used that time not to sell the technicalities of the business, but to sell out emotional stories as founders to show that it’s normal for us to overcome unrealistic odds.

He said the crowd bought into the human stories and not the technicalities.

‘‘We said it’s normal for us to overcome adversity and challenges, that it doesn’t matter what comes our way. It’s normal for us. We will find a way to succeed. And so people bought into the emotional story. They always say, you shouldn’t invest in a business. You should invest in people. And yeah, basically people bought the founder’s shares, in the founder’s energy, in the founder’s vision. And so literally everyone in that room at the launch party made us the first 27 million. And so we sold apps 27 millions in the first 72 hours and there were just a frenzy of people trying to jump on and grab the last time.

I think if you look inside now, it is 32 million, 409,000 rands. So they’ll have to be some refunds for some people who just came in and about a hundred people came in on the last day, like before three o’clock.

On Why They Choose Uprise.Africa to Raise The Funds

He says Uprise.Africa has direct exposure to all the upsides and downsides of the business

‘‘I didn’t know who they were,’’ he says. ‘‘We made it a conference. I related with its CEO as a founder. She said cool. They have a framework and are licensed to do it. So effectively it’s as good as a payment gateway. So if you’re running an ecommerce business and pay fast or need paypal or visa, mastercard go to them for a widget. They can accept payments, but they’re relying on how good your business is .

One of my favorite little proverbs is if a bird is sitting on a tree on the branch, it’s not worried about the branch snapping. It has faith and confidence is in its wings. Crowd funding is an easy way to take money from the crowd, but there’s a context to it. If we show the analytics of the money we raised, everyone is within one or two steps of our network. And so accountability is really your socially accountable tool to your community and your network. If they believe in you, you’re not going to have a much bigger responsibility to them.’’

He says Uprise.Africa will own a 25% stake in the startup.

‘‘They will also have an independent board member. Uprise.Africa will be representing the crowd and yeah, fix me. But there are voting rights and things. So Uprise.Africa has the stake on behalf of the people who invested in the initiative. I think they manage it for about 12 months or so and then they give it to us. They have also put automated technology in place for the share registers and the certificates and the reporting.’’

On Why More Black Women Invested In The Startup Through The Crowdfunding

‘‘I think maybe it’s because we spent a lot of time with Uber drivers and optimistic ladies and all security guards and receptionists. They used our technology and they’re like, sweet, I can get my license renewed. Daily visits to the management system are amazing. So it is just crazy for us because we actually thought that we were so proud that we managed to get 30% black female ownership. They were like, this company’s plan is going to dilute that potentially down to 22%. We had signed agreements to become level two. And so it was a concern. It was just, again, a miracle from the universe that it actually ended up swinging way better than we could give. I’ve imagined it. So I think that’s the beauty of opening it up to the crowd. If you’re focusing on one or two high net worth individuals, you’re kind of going for a specific target.’’

Other Startups In South Africa Are Also Resorting To Crowdfunding

Crowdfunding is having a moment in SA. BackaBuddy, the funding project used to raise money for service station attendant Nkosikho Mbele, for example, has so far generated over R107 million for various causes.

Uprise.Africa CEO and co-founder Tabassum Qadir say the company is in negotiations with one of the new share trading exchanges to have equity crowdfunding investors trade their holdings on its platform.

‘‘Although crowdfunding has long been used to support start-up ventures, equity crowdfunding is different as it enables people to become direct shareholders in a venture, ’’ Qadir says,

This is in contrast to traditional crowdfunding services that generally only allow contributors to get new products from the ventures they support for free.

To ensure that the interests of investors are protected, Qadir says prospective companies need to be vetted by its investment committee. Once approved by this committee, a designated Uprise.Africa board member will act as an overseer of investors’ interests in the company.

In exchange for about R24 000, Uprise.Africa will conduct due diligence and organize a 90-day ‘campaign’ to build interest in the company.

Qadir says using crowdsourcing to support start-up businesses is widely seen as a way to drive economic development. The World Bank, for instance, estimates that the global equity crowdfunding sector will be worth more than $93 billion by 2020.

Without crowdfunding, prospective investors either have to wait for a company to be listed on the JSE or invest at least R100 000 into a venture equity firm’s portfolio to get a stake in emerging businesses. With equity crowdfunding, however, for as little as R1 000, they could get a stake in a company as it is about to enter a fast-growing stage.