TechInAfrica – Last year, South Africa’s unemployment rate hit 27.1% which means there is a lot to gain from the venture capitalist (VC) industry. The venture capitalist industry does not only empower business development but also allows entrepreneurs to enhance their businesses as well as drive jobs creation and employment opportunities.
This opinion made by the CEO of the South African Venture Capital Association (SAVCA), Tanya van Lill, at a case study session in Southern Africa Conference taking place in Stellenbosch.
Van Lill explained, “While small businesses are vital to job creators, many require growth capital to do this effectively. And because young companies generally don’t have access to more traditional sources of funding, investments by VC firms become an essential form of financing.”
Referring to SAVCA’s 2018 Venture Capital Survey showing that 97.1% of VC-backed business would have developed slower but not for the VC investments. Furthermore, the study also revealed that 77% of companies that have received investment from a VC firm has increased the business’ capability in increasing quota of full-time positions.
One of van Lill’s reference is a tech startup, SweepSouth that runs an on-demand platform for booking home cleaning services. The startup provides over 11,000 cleaners that are registered on the platform.
Aisha Pandor, the Co-Founder and CEO of SweepSouth, who happened to speak at the conference said, “It’s about upskilling, educating and uplifting South Africans through employment. Aside from the 11,000 SweepStars, we have also been able to build a team of about 42 in-house employees, ranging from call center agents to tech developers. As we grow the base of domestic workers on the platform, we are also able to continually grow this internal team.”
Speaking about domestic workers who make progress, Pandor said that there is an opportunity for them to join the company’s internal team.
“Domestic workers who were able to acquire skills or educate themselves further while working part-time on the platform are better positioned to seek other employment opportunities. We’ve had multiple SweepStars progress to join our operations team and recently even had a SweepStar join our engineering team as a junior developer.”
SweepSouth is just one of many other examples of businesses that have been able to create positive impacts on job creation and on employment as a result of VC funding.
This, van Lill says, is just one of many businesses across the country that have been able to make a positive impact on employment, as a result of VC funding. “At the end of 2017, the Southern African VC asset class had a total of R4.39billion invested in 532 deals. In addition to funding, VC investors also provide valuable support and mentorship to their portfolio companies, which helps them to grow and ultimately employ more people.”