These millennial founders on the secret behind their successful acquisition

Posted on September 22nd, 2016

These millennial founders on the secret behind their successful acquisition

In 2014 two entrepreneurs, Neliswa Fente and Raelene Rorke Clarke launched SpringAge, a youth-led innovation consultancy which helps businesses better serve their markets.

This August they announced that the startup had just been acquired by one of Africa’s leading professional services firms, Deloitte.

SpringAge helps its corporate clients (the likes of Microsoft4Afrika, South African Breweries, Woolworths, Pepsico, and Vodacom) to gain greater insight and come up with solutions to complex problems using innovative methodologies that they have developed.

Key to their success is their use of young people as a resource – an increasingly valuable resource on the continent as research shows that 70% of Africa’s population now comprises millennials – a market that many are eager to tap into.

Their teams are made up of young professionals, entrepreneurs and community leaders with insights and experience relevant to helping corporates solve specific challenges whether it’s figuring out how to remain relevant to the youth market, finding new ways of working with millennials or innovative ways to approach a new market.

“Stick to your craft, do it well and prepare for the big time”

A perfect fit
The partnership will see SpringAge form part of Deloitte Greenhouse Africa, an initiative that Deloitte launched globally including countries such as Australia, Belgium, Brazil, Canada, EMEA, Israel, the United Kingdom and the United States.

Greenhouses are creative and collaborative spaces designed to help Deloitte clients stay competitive in what is an increasingly disruptive environment through corporate innovation and strategic planning using technology and expert facilitation.

For Deloitte, SpringAge is a perfect fit said Thiru Pillay, managing director of Deloitte Consulting for Africa at the time of the announcement. “What makes SpringAge a compelling value proposition is the fact that its professional network consists of millennials who are focused [on] finding different ways of addressing the challenges faced by business today. Driven by the two dynamic owners, SpringAge is a logical fit for Deloitte.”

Deloitte currently has a facility in Johannesburg with one expected to open in Cape Town later this year with plans to open two more in the rest of Africa, according to Pillay.

SME South Africa speaks to co-founder Clarke about why Deloitte came calling and how the partnership presented the perfect opportunity to scale. 

Q: What does the recent acquisition mean to the two of you, both as entrepreneurs and co-founders?
Personally, it is a proud and humbling thing to have happened to us. Our intention in starting SpringAge was to make a positive difference in South Africa and inject hope and significance into the lives of young South Africans.

We worked hard at it, keeping promises to ourselves and applying our minds and hearts to whatever project we took on, and now to see that the hard work created value, not only to those we touched directly but to a global organisation has value in it, is affirming. It reminds you that when you try things that are bigger than yourself, you will be rewarded in ways that you never thought. Follow your purpose and work hard, it always pays off.

Q: What went behind the decision to sell the business? 
We saw it as a new opportunity to take SpringAge in a new, more scalable direction. The opportunity to continue building our youth-led innovation value-offering in a global organisation which leads in leadership and innovation was an opportunity we could not refuse. On an individual level, it would give us a chance to use our strengths and explore our visions in a completely different setting and we are up for new adventures.

Q: Did you have acquisition as one of your goals when you started and were growing the business?
Not quite. However, we had always told ourselves that as we build SpringAge let’s make sure we “build to sell”, but in a figurative way – [ensuring] that we committed to operation excellence, that we were sure we would always be ready to talk about and show our value if anybody asked. So I guess when Deloitte asked, they liked what they heard.

Q: What do you believe Deloitte saw in your business that made them want to take you in?
I think they liked this unique value offering in a space they play in. The fact that we work with young people to innovative, young people who are not in any way part of Deloitte, in some ways going against how they work and they had the foresight to want to learn about this new way of consulting.

Millennials and their rapid growth on the continent, make them a very important and relevant constituency and Deloitte wants to get closer to them, so building youth-led innovation into the way of working gives them a very real and important differentiator.

“It’s that authentic energy and the love for your craft that they are buying”

Q:  What were some of the more difficult questions you had to answer during the acquisition process?
Money and entry levels are always tough and real conversations, also being able to communicate the vision and the future value you plan to bring in is an important one for the seller and the buyer.

Q: How big is money as a consideration in the process?
It’s not the biggest thing, but it is an important line item. It is key that all parties are happy with the deal they sign and that they feel valued and satisfied. However, when you can see the growth potential, the money conversation becomes easier. When you trust yourself to achieve what you say you will achieve it also eases things up. We love the story that we can tell and value the steps in the journey. [This makes]  making money less of a priority.

Q: What are some of the implications of the buyout for yourselves as the founders and the rest of your team going forward?
Work hard, and grow the practice while navigating the very different corporate world.

Q: What do you think other entrepreneurs or founders can learn from what the two of you have accomplished in getting the attention of a major company?
Stick to your craft, do it well and prepare for the big time (like a buyout) even if it is not in your plans, remain ready, which means keep your backyard clean (admin), serve clients you are proud of and do work that you are proud of. Keep the passion alive – it’s that authentic energy and the love for your craft that they are buying.

Q: What is the next goal for SpringAge and the two of you?
Our Deloitte home is in the Greenhouse, and there are currently about 40 Greenhouses globally. Could we take SpringAge by Deloitte into every Greenhouse? I think so.