Entrepreneur-turned-angel investor Daniel Guasco knows a thing or two about building and exiting a business, having founded Twangoo with Wayne Gosling in 2011 and subsequently sold it on to Groupon. Now the pair, through their investment fund, are looking to offer South African startups the same opportunities.
“We were obviously just very fortunate for Groupon to have been in the position that it was. And we managed to sell the company and made good money out of it,” Guasco tells Disrupt Africa.
“We’re entrepreneurs ourselves, we made a bit of cash through that deal, and we’re inspired by entrepreneurs in Africa.”
Team Africa Ventures, which looks primarily at fintech and consumer tech but is not tied down to any one vertical, was the result of this inspiration, with Guasco and Gosling having since put between US$10,000 and US$300,000 into 13 investments, including LulaLend, wineOwine, HealthQ, Latimer, Ekaya, 8bit and WumDrop. An excess of US$1 million invested thus far.
“We don’t have anything specific from an industry vertical perspective, we look for things that are going to disrupt traditional industries and are very unique in what they do,” Guasco said.
Some of the fund’s investments have already been a small success, with Guasco and Gosling having already exited Glambox, 5ounces and Runway Sale. But Guasco says there is not really a fixed timeframe when it comes to Team Africa Ventures making an exit from a startup.
“We’re opportunistic around this, we don’t have any specific time horizons. If we see a reason to sell at a good value of there is interest from the market then we are open to it. But going into it we take a five to seven year horizon,” he said.
“It is partly our desire to satisfy the ecosystem, stimulate entrepreneurs and provide opportunities we perhaps didn’t have.”
Guasco said the pair are typically attracted to startups by the quality of the entrepreneur in question, or those backing the entrepreneur. Investments in the likes of WumDrop and Ekaya have been made by many of the same individuals or companies.
“We’re always there, and if it is related to e-commerce we obviously understand that kind of thing and can lend a lot of value to that. But something like a HealthQ, less so. Our interest in something that we understand less of is more validated the entrepreneur or who else has gone in there,” he said.
“We are approached with opportunities, it is not like there is an absolute abundance. We have to filter through a lot of approaches that aren’t quite there.”
Guasco was recently elected as chair of Western Cape startup support organisation Silicon Cape, which was founded in 2009 by investor Justin Stanford and entrepreneur Vinny Lingham. The organisation last year raised more than ZAR3 million (US$270,000) in funding from FNB, and Guasco has said he is open to further backing.
South Africa is still an evolving tech startup ecosystem, according to Guasco.
“I wouldn’t say we’re inundated with opportunities. It is to do with the evolution of the ecosystem. There is certainly no shortage of money, but there is a lack of entrepreneurs that know how to build a business,” he said, adding he was positive Silicon Cape was now well placed to contribute even more to this evolution.
“Without money it makes it very difficult to do anything. And the committee that has come on board is really encouraging,” he said.
“I’m very positive about what is going on and I’m hoping that the next weeks and months will see a lot more activity.”
Team Africa Ventures would also be open to the idea of branching outside of South Africa, but Guasco said it would have to be the right opportunity.
“We’re always open to that. The challenge is trying to understand those local ecosystems. We understand South Africa quite well and we’ve been in that, but we’re not opposed to doing it. We’ve not found anything interesting yet.”