Three international start-ups this week announced their entry into South Africa, either as a major element of their global expansion or an opportunity to make an impact in the local market.
Human resources technology (HRtech) provider Atlas this week said it had raised $200m (about R3.6bn) to support global expansion, and planned to make South Africa its regional headquarters for the Middle East and Africa (MEA).
Corporate meeting technology company Troop raised $11m to fund expansion in South Africa and globally.
The most intriguing start-up expansion into the local market, however, was announced by EvansWerks, a 3D manufacturing operation that has launched a 650m2 design centre in Cape Town. The company was founded in 2021 by US filmmaker-turned-inventor Justin Eugene Evans, and has a presence in four locations globally.
The EvansWerks Creative Lab was financed jointly by Evans and his business partner (and only outside investor) Jamaican-American actor Jason R Moore, best known for a central role in the Netflix series The Punisher.
Both saw Cape Town as an ideal local hub, but almost selected Kyiv in Ukraine, which they “looked at” a few weeks before the Russian invasion.
Evans told Business Times: “About five years ago, my wife and I were driving through Chicago engaged in a lengthy conversation: what made Silicon Valley take off like a rocket in the 1970s? And could it be replicated? We realised that Silicon Valley was never planned, and yet was inevitable. It had the right ingredients. We began listing those ingredients and realised that any place we wanted to build a business needed a majority of those same conditions.
Cape Town meets the majority of those conditions. I believe it is already the Silicon Valley of Africa. In the next five years, the entire world will be talking about Cape Town
— Justin Evans
“Cape Town meets the majority of those conditions. I believe it is already the Silicon Valley of Africa. In the next five years, the entire world will be talking about Cape Town.”
Evans said among the reasons for locating a global start-up in Cape Town was its deepwater port, though it “could use some upgrades”. The city’s international airport was better than San Jose’s airport was in the 1970s.
“It’s a great airport and has sufficient direct flights to economic hubs around the globe. I can get to Frankfurt, Atlanta and London directly,” Evans said.
Other factors in Cape Town’s favour were excellent engineering programmes at top universities, including the University of Cape Town’s mechatronics programmes, which were world class; it had a mild climate and existing entrepreneurial infrastructure.
“While Cape Town’s investors aren’t as skilled at deal-flow as Silicon Valley, the beginnings of a sophisticated investor class is emerging here.”
He said livability is where Cape Town excels. “Imagine stepping off the plane into the San Francisco airport in 1982. Cape Town has the same jaw-dropping livability that the Bay area had — past tense! — in the US.
“What it’s missing, we’re trying to provide,” Evans said. “We want to provide the kind of tech infrastructure that makes it easy for a tech start-up to thrive.”
The company aims to simplify global access to 3D printing technology and production for industrial manufacturers and retail designers. Evans said he recognised a need in the region to provide reliable access to production with 24/7 uptime, cutting-edge technology, and dramatically reduced delivery timelines, from concept to prototype.
The Creative Lab will provide equipment, including industrial 3D printers, milling machines, laser cutters and on-demand 3D printing in steel, copper, titanium, resin, rubber, plastic and wood.
“The goal of EvansWerks’ Creative Lab is to help individuals and businesses across South Africa bring their ideas to life,” Evans said. “We provide space that is innovative and inspiring for clients to explore and create.”
Meanwhile, US-based global HRtech company Atlas, which aims to simplify international hiring and payroll, has chosen Johannesburg for its regional headquarters. CEO and founder Rick Hammell told a media briefing in Sandton this week: “The foundation of what we do is to help people, making sure we create opportunities where companies and talent are able to connect where they’ve never had that opportunity before.”
In September 2022, it raised $200m “to support global expansion and meet the strong demand for remote working solutions and cross-border workforce management”.
It is now putting a local senior leadership team in place to lead this growth, and has appointed Nobuntu Ndlovu, a seasoned senior marketing executive, as its regional marketing vice-president.
She said she expected strong demand from start-ups, technology and fintech companies seeking to expand abroad.
“We foresee strong demand to support South African businesses as they expand into the MEA region and beyond. There is also an opportunity to support regional companies looking to capitalise on the services that digital nomads provide.”
Troop, the global meeting technology platform, does not have a physical office in South Africa, as all employees work remotely. Its investment will go into increasing its local employee base considerably by 2025 “to enhance its innovative meeting-planning ecosystem and offerings for the local market”.
Troop has ambitious growth plans, mainly in Spain and South Africa. It currently has 17 people in South Africa, mainly in development, and it is looking at doubling this in 2023, and growing the company to about 170 people by 2025.
Co-founder Leonard Cremer said this week: “Troop’s expanding presence in South Africa comes at a crucial time, with the South African economy expected to make an upturn, and its meetings, incentives, conferences and events industry likely to grow considerably over the coming year.”
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