Futuregrowth invests in South African online services disruptor startup SweepSouth
Futuregrowth has invested in SweepSouth, a disruptive online platform for booking, managing and paying for home cleaning, and now a variety of other services.
The business, which was first established in June 2014, has expanded its offering from its personalised home cleaning roots to gardening and pool cleaning, heavy lifting, fixing and maintenance and, most recently, commercial sanitation. Its services are available in South Africa’s four major metropolitan areas, namely Cape Town, Johannesburg, Pretoria and Durban.
Amrish Narrandes, Head, Unlisted Equity Transactions at Futuregrowth said: “SweepSouth is an early-stage business disruptor that, instead of solving a Silicon Valley problem, is solving South African-specific problems. The company has taken a large segment of the informal sector, which is one of the biggest employers in South Africa, and formalised it, giving people protection and security in their working environments.”
It’s been more than three months since South Africa went into lockdown and the cost to the economy of the sudden stop in business activities is becoming increasingly apparent. Now more than ever, South Africa needs the dynamism and growth potential, as well as employment, that early-stage innovative companies like SweepSouth have to offer.
Venture capital investments provide the funding that supports the development of these entrepreneurial engines of economic growth. Futuregrowth has been identifying promising companies like SweepSouth that offer great potential from both a commercial and social impact point of view. Through the Futuregrowth Development Equity Fund, the investment manager makes selective venture capital investments into what it believes to be distinctive businesses and propositions that offer significant growth potential.
SweepSouth stood out for Narrandes because it met all the criteria Futuregrowth has identified as necessary in early-stage companies: SweepSouth has a large addressable market in the informal sector, it is incredibly disruptive, it is having a positive social impact on the economy and the management team has proven credentials in building the company to where it is now, as well as engaging in ongoing innovation.
The business has expanded the scope of its services to the point where it now offers its clients access to a comprehensive suite of personal services. It has also pivoted its service offering into commercial sanitisation, giving it diverse sources of revenue and avenues for future growth.
The social impact credentials of the company are impeccable, says Narrandes. “SweepSouth has played a material role in empowering previously vulnerable informal workers by giving them a voice and the ability to control their destiny because they have flexibility and control over their own time.”
It is SweepSouth’s stated mission to “create happy homes by providing dignified, flexible work at decent pay to SweepStars”. The company calls the people who provide the services on the platform SweepStars because it wanted to move away from loaded terms like “maid” and “char”.
Aisha Pandor, co-founder and CEO of SweepSouth said: “We are uplifted each time we see our SweepStars referred to in this way, as it represents how a positive idea can take shape and can change the negative language that has been so deeply entrenched. SweepSouth provides dignified work opportunities for thousands of SweepStars, 71% of whom were previously unemployed and 29% of whom were underemployed. A significant 84% of SweepStars are primary breadwinners at home, making the income they earn through the platform vital in enabling them to support their families. SweepStars can dictate where and when they would like to work, earn up to 80% of the booking fee (plus tips), and learn to use technology to unlock the power of a device like a smartphone so that it becomes a tool that provides access to work.”
Futuregrowth’s latest investment in SweepSouth adds to the Fund’s growing portfolio of other early-stage investments. Earlier this year the Fund invested in Lifecheq, a digitised private wealth management business. In late 2018, the asset manager made another venture capital investment in Yoco, the innovative technology-driven point-of-sale payments provider. The Futuregrowth Development Equity Fund was the first South African institutional investor in the company and, to date, the investment has proved to be a success.
These investments put the Futuregrowth Development Equity Fund in a strong position to benefit from the significant growth potential of these entrepreneurial, early-stage investments - while relying on its core established investments to provide the security and consistency of returns needed to balance out the risk-return profile of the Fund.