The Small Enterprise Development Agency (Seda), under the Department of Small Business Development, is leveraging the capabilities of hardware technology investor and incubator Savant Technologies to help science and technology inventors start businesses.
The partnership was launched at the Savant offices, in Cape Town, in October. Engagement between Seda and Savant started in 2015 to enable the latter to focus on scaling up operations and broadening the pipeline to include innovators in the broader Cape Town community.
Entrepreneurship plays a critical role in economic growth and improving the standards of living in many countries, including South Africa. Business owners provide opportunities for innovation and increased employment, in addition to the creation of new markets, says Seda CEO Mandisa Tshikwatamba.
“While software has garnered much of the investment and attention in the tech space, hardware inventors are slowly gaining ground internationally. Hardware technology incubators, like Savant, are looking for the creator and, ultimately, producer of the next Rooivalk attack helicopter, Kreepy Krauly pool cleaner, Tesla electric car and, perhaps, even the next SpaceX,” she says.
Incubated Enterprise Savant is a specialised, commercially focused hardware technology incubator founded in 2005 by CEO Nick Allen. The business model, which includes an equity stake in the incubated enterprise, was designed to nurture South African startups in science and technology innovation by focusing on projects with global market appeal and strong intellectual property protection, as well as technology capable of meeting the requirements of the target market.
To date, Savant has secured R106-million in startup and seed funding. Of the startups incubated, 88.9% have become fully fledged businesses and the total revenue earned by Savant-incubated companies is R2.51-billion. Some of the companies supply retailers including Woolworths, Dischem, Spar and Clicks.
Prior to founding Savant, Allen, a qualified engineer and veteran entrepreneur of South Africa’s postdemocracy development ecosystem, worked for public and private small, medium-sized and microenterprise incubators.
The experience led him to identify untapped potential in a segment of South African inventors, namely those who wanted to build businesses around their innovative ideas related to physical hardware technology, but lacked the necessary know-how to start, run and scale the enterprises.
Additionally, hardware technology, compared with software development, is labour intensive.
“Contributing to much-needed economic growth in South Africa, the ‘startup’ hardware renaissance is well on its way to cultivating a new breed of job-creating manufacturing businesses that have a bias towards innovation, continuous improvement and exploring new market opportunities,” said Tshikwatamba.