When Abu Cassim started Jozi Angels as an informal endeavour with some friends, he did not imagine four years later it would be an established company with over 30 investments.
Part of the family that owns and operates Fashion House, the Johannesburg-based textiles firm that turns 80 years old next year, Cassim spent the best part of 10 years in asset management in South Africa and Dubai, before studying for an MBA at IE Business School in Madrid.
He now heads up Jozi Angels, which has built a sizeable reputation but only started on an informal basis four years ago.
“A few friends and I were running a non-profit in the startup space when I began assisting high-net-worth-individuals on a few startup investments. We formalised the company in early 2017, bringing the individuals together as a group,” Cassim told Disrupt Africa.
Since then it has grown the network to include 23 investors, become affiliated with the Global Business Angels Network (GBAN), African Business Angel Network (ABAN) and South African Business Angel Network (SABAN), and made over 30 investments, backing the likes of experiences platform Tour 2.0, fitness app FitKey and e-commerce platform Momslist.
“Most of our investments are in Gauteng as we prefer being close to portfolio companies but we have made investments in Cape Town-based startups as well,” Cassim said.
Jozi Angels is not a fund – investments are made by individuals or syndicates.
“The investors are then direct shareholders in the businesses. Our investors are typically entrepreneurs in their own right, they have built successful businesses and are now looking to give back, have fun and hopefully make a return on investment,” said Cassim.
“Angel investing is a people’s game. We invest in people and need to connect with the people we back. We typically look for energetic game changers that are doing something unique. Our requirements often look similar to that of a VC, but we invest at an earlier stage. In order of importance, we look for a strong team, innovative idea, product-market fit and potential scale.”
He said the angel investor market in Africa is ten times smaller than the venture capital market in terms of capital invested, meaning businesses like Jozi Angels have a lot of hard work ahead of us.
“Our aim is to grow the network to 50 angels during the course of 2019. We’ll look to integrate into the business and corporate communities while finding ways of improving the quality of deal flow at the same time,” Cassim said.
He does feel the group is operating in the right market, however.
“We wouldn’t be investing if we didn’t believe in this market. The market is still young and we’re slowly developing our own narratives – we can’t copy-paste what’s happening in the US. Over the six years I’ve been active in the South African tech space, I’m seeing a lot more interest from all corners: corporates, students, business professionals and investors. The momentum is there but we have a long way to go,” he said.
That said, challenges remain.
“I get a few hundred funding applications a month. Most young businesses lack creativity and those that are unique struggle to find early adopters. We tend to back companies that have both these elements,” Cassim said.
More support is needed to ensure more entrepreneurs succeed, especially on a government level.
“Being an entrepreneur is one of the biggest challenges anyone can undertake and there will never be enough support. The challenge ahead for policymakers is the competition coming from innovation hubs like Mauritius, Nairobi, Lagos and markets like Rwanda that are smaller but more agile. Like all good entrepreneurs, policymakers need to continue to innovate and move forward,” said Cassim.