Kalon, a venture capital fund and Smollan Group, an international retail solutions business invested R7 million each.
SnapnSave, founded by Mark Bradshaw is a cashback coupon app that gives shoppers cash back on their favourite products, wherever they shop, just by snapping a photo of their till slip.
According to the press release, one billion people globally are expected to use digital coupons by 2019.
“Mobile-based coupons are part of the daily shopping habits of Europeans and Americans. Now we’re seeing this trend emerge in South Africa with over 15% of SA smartphone owners already having 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,” says SnapnSave CEO Mark Bradshaw.
In just over 18 months, SnapnSave has given SA shoppers over R3,5m cash back into their bank accounts and is about to reach 200 000 app installs.
The funding will help grow the app downloads to 500 000 in South Africa within a year and will support entry into Asian and African regional markets: Singapore, Malaysia and Vietnam, as well as Nigeria, Kenya and a North African country. SnapnSave will enter these markets via Smollan’s network which is present in more than fifty countries and provide services to over 500 000 retailers.
“Our till slip technology means shoppers can get cashback 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,” adds Bradshaw.
Clive Butkow, Kalon CEO comments, “We are excited about the investment and its growth opportunities locally, into Africa and globally.”
The investment forms part of Kalons’ strategy to position itself as the preeminent venture capital company in Africa, investing in disruptive digital technologies solving African problems.
The fund has raised R90m to date and aims to raise a further R160m by the end of February 2018. The investment announcement comes at the same time as Kalons’ next capital raising round, which opens in early August and closes on 30 September 2017.
Through Section 12J Venture Capital Companies, such as Kalon Venture Partners, the South African government aims to stimulate the economy and promote investment in small and medium-sized businesses, whilst providing tax benefits to investors. The tax relief is potentially 45% for individuals and trusts and 28% for companies, which mitigates the investment risk and significantly enhances the potential return.
Kalon Venture Partners is targeting returns of more than 30% per annum and a minimum of five times the money invested over five to seven-years.