A R3-million boost from First National Bank (FNB) has been received by a growing community of technology entrepreneurs in Cape Town to strengthen its network and help develop more start-ups in the technology sector.

“This will be a real catalyst for us. The only way to build tech[nology] businesses is to develop partnerships and a network,” Silicon Cape chairperson Alexandra Fraser told several hundred people at a function in Cape Town.

Silicon Cape is an 8 500-people strong community of technology entrepreneurs, developers, creatives, venture capitalists and angel investors aimed at creating more and better technology start-ups as well as providing access to capital.

Fraser said the support from FNB would enable Silicon Cape to apply for matching funding for start-ups. It would also be used to hire an operational team and launch a platform for women in technology.

Cape Town mayor Patricia de Lille welcomed the move and said the growth of the technology industry was in line with her plan for Cape Town to be the digital city of Africa.

De Lille noted that competition among cities was extremely tight and Cape Town needed to play to its strengths.

“Our vision is to use unique infrastructure to create a new digital centre in our city. We want to encourage those with good digital ideas. We will be creating partnerships and want to direct support to those who need time to make their good ideas great.”

She pointed out that the City of Cape Town had adopted an open data policy to encourage entrepreneurs, while the city had prioritised rolling out broadband.

Trustee of Silicon Cape Roger Norton said entrepreneurs in Cape Town and surrounding areas were particularly strong in the development of mobile applications, such as SnapScan, for instance, which allowed buyers to pay for goods using their cellphones.

Other growing ventures that had been developed include online beauty products retailer Ruby Box, the extremely popular Takealot.com and Constantia-based Yuppie Chef.

Norton explained that developers and people with coding skills were in huge demand by small start-ups. He added that they tended to be snapped up by big corporates in Johannesburg and paid “very good” salaries, but Norton encouraged them to take risks and move into the entrepreneurial field, which could offer excellent returns. 

“[Application] engineers are not taking the risks and jumping into the start-up world. We need to encourage them to get more involved in start-ups,” he emphasised.

Technology entrepreneur and judge on the South African version of Dragon’s Den, Vinny Lingham, said people who committed to working in small companies could earn rich rewards if they persevered.

The company he developed, Gyft, a mobile platform for gift cards, was proof of this.
It was recently sold to the US’s largest credit card processing company for over $50-million.

“I gave shares to my seven Cape Town employees, who had been earning start-up salaries working on Gyft for two years and they ended up making millions of rands.”

Lingham encouraged entrepreneurs to take the plunge.

“We have a culture that is risk averse. People think they need to raise large amounts of capital. But raising smaller amounts more often is the only way to go. It takes ten years to become an overnight success,” he quipped.