South Africa’s venture capital company Kalon Venture Partners (formerly Grotech) and retail solutions company the Smollan Group SA have together invested R14-million for a minority stake in SA shopping community SnapnSave.
Kalon Venture Partners chief executive Clive Butkow said the deal, which was concluded late last week, will see Kalon and Smollan each invest R7-million in the Cape Town based startup, in return for a 20% stake each.
SnapnSave’s app facilitates discounts for shoppers on their favourite products, wherever they shop, just by snapping a photo of their till slip.
SnapnSave CEO Mark Bradshaw said in just over 18 months, SnapnSave has given SA shoppers over R3.5-million cash back into their bank accounts and is about to reach 200 000 app installs.
Bradshaw, who has taken a few days off from work following the conclusion of the deal, said the funding would help to fund a 12-month plan to grow the app’s downloads to 500 000 in South Africa.
The funding injection will also help the two-year old startup to enter three Asian and African regional markets, which Bradshaw.
Based on their existing use of coupons and on mobile phone penetration, the startup has identified these as Singapore, Malaysia and Vietnam, as well as Nigeria, Kenya and a North African country.
The idea is to grow the app on the back of Smollan’s network which is present in more than 50 countries and provide services to over 500 000 retailers.
“Our till slip technology means shoppers can get cash back wherever they shop simply by taking a till slip selfie. The tech is all enabled without any till point integration that as a result means the product can easily scale into markets without any barriers,” said Bradshaw.
The current funding deal follows an initial angel investment injection the startup received when it launched in July 2015. However, Bradshaw did not want to disclose the figure when asked by Ventureburn.
Butkow said over one billion people globally are expected to use digital coupons by 2019.
Bradshaw added that in South Africa over 15% of SA smartphone owners have already used a digital coupon. “Consumers love saving money and with the state of the economy they are looking at ways to put real cash back into their own pockets,” he said.
Kalon Venture Partners is a VC fund set up under the Section 12J VC tax incentive where investors receive a 100% deduction of their investment from their taxable income.