JSE-listed Blue Label Telecoms and Blue Pencil Management Architects – trading as Blue Pencil – have launched a “boutique” business accelerator programme to provide high potential South African startups with access to funding, market opportunities, channels and skills.
The programme will combine Blue Pencil’s channel development, investment and business acceleration services with Blue Label’s access to funding, infrastructure and skills to help selected businesses fast-track their growth.
It will focus on scale-ups maturing from their incubation phase and ready to develop into more mature businesses. The initiative will provide them with access to skills and infrastructure cutting across finance, IT, HR, marketing, product development and other business functions.
Where businesses need capital to grow, Blue Label may provide funding in exchange for an equity stake or help them to secure external funders. The two companies are currently evaluating companies suitable for the programme, and aim to bring 10 on board during the first quarter of next year.
“South Africa as a nation is crying out for initiatives that can create jobs and stimulate economic growth,” said Tallies Taljaard, owner of Blue Pencil.
“Many small businesses struggle to take off and thrive after the incubation phase – by increasing their chances of success and through the right interventions we can help them to have a positive impact in the SMME economy.”
Mark Levy, chief executive officer (CEO) of Blue Label Telecoms, said while there exists a strong focus on incubation, there are not enough structures in place in South Africa to accelerate the growth of high potential organisations.
“We will seek out businesses that are built on innovation and disruption and support them with Blue Label Telecoms’ frameworks, experience, and infrastructure,” he said.
“We want to enable them to upscale rapidly and, ultimately, penetrate new markets across Africa, and the rest of the world. We will work with them in terms of commercialisation and market opportunities, assist them to refine their value proposition and see where we can leverage synergies with Blue Label.”
The first phase of the accelerator programme will last for approximately three years, with Taljaard saying it is not going to be a “simple and quick intervention”.
“We are in it for the long haul. Blue Pencil has done a lot of work with incubators in the past, so we have engaged with some of them to identify entities for our accelerator shortlist,” he said.
“Blue Label Telecoms not only has the resources to assist with an acceleration project of this nature, but also the entrepreneurial spirit. It understands the challenges these new businesses face and can help them overcome obstacles. Scalability does not depend on a formula, but rather thrives with the hands-on approach both our companies will take in this venture.”
Levy said in the initial stages the aim will be to test the depth of intervention that will be required to accelerate the chosen companies, and to consolidate best practices.
“Although there is a social responsibility aspect to this project, our aims are largely commercial,” he said Levy. “We help to establish a foundation for these businesses, assist with the acceleration of their initial growth and ultimately, invest in them, either directly or via a third party.”