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Alumni Investments and Current Deal Flow

As there is no competition in this space, Alumni has not needed to advertise to attract ongoing deal flow. The directors play an integral role in the entrepreneurial ecosystem and are being exposed to disruptive technology companies within the energy space seeking start-up capital. From Alumni’s previous experience, the majority of our deal flow is sourced through the management team’s networks/relationships and through our active involvement in the entrepreneurial ecosystem.

Since the start of the founder’s first entrepreneurial venture in 2011, the Alumni team have reviewed in excess of 100 Business plans, have provided customers for three of the applicants and are at the final stage of investing in six companies. The key individual providing regulatory cover has dealt with the buying and exiting of several multi-hundred million rand transactions in the energy and technology space as a private equity manager.

Identified potential investee companies in Series A funding round

Africanopy (Pty) Ltd

Africanopy (Pty) Ltd (“Africanopy”) is a rural internet solution for the developing world, that was originally designed as a multi-frequency transportable communications network for mines. After being invited by the South African government to adopt the solution to rural telecoms in South Africa, Africanopy has received support from the municipality of Empangeni in KwaZulu Natal and the Natal Provincial Government to create a TV White Space based internet provision using local WiFi mesh networks connected to a transportable network, which in turn connects to the 14,000 km Broadband InfraCo fibre network and the West African Cable System. Competitive advantages include – access to spectrum at free or discounted prices, technology that reduces the cut-off point of coverage from 150 subscribers per square kilometer to 4 and deployment times of the enabling 5-Star network of 1 day per point of presence and control over the landing page.

A number of security applications, blockchain-based bank securitization of data, anti-poaching, content creation applications and energy saving could create a new developing world cluster of software-based services. If Africanopy achieves its business plan of reducing data costs to $1 per gigabyte of data and achieves its market penetration in South Africa, data sales alone will create 10,000 direct jobs and $1 billion of cash flow in year 10. The service is needed in most developing and many developed economies.

Gyrotek (Pty) Ltd

Gyrotek represents a breakthrough in the $3 billion (R40 billion) airborne surveying niche – where it provides better quality airborne surveying data, closer to the ground, in a safer manner than the competition at 1/8th of the cost of the competition. The company has landed a research and development technology partnership agreement with a company in the UK, who has made a first milestone payment for a technology innovation project, where the intellectual property will be held by Gyrotek. The company has also landed its first customer in the form of a UK-based exploration project in Namibia. 24 other future customers have been identified through the Alumni network.

Passive Seismic Tomography (Pty) Ltd

Passive Seismic Tomography (Pty) Ltd (“PST”) is a company set up to pursue a technology after which the company is named: The problem that it plans to address lies in improving on the $10 billion seismic industry. Costing $200k per square kilometre, seismic is a required component of the conventional exploration toolkit for oil and gas. It has major shortcomings – which include the fact that it is not particularly effective – with a 3% success rate in rank wildcat exploration opportunities that Alumni plan to pursue. It is expensive onshore and less effective than onshore as well as being environmentally invasive. Where seismophones need to be placed at the bedrock which can be on the surface or separated by 200 meters of sand which will need to be drilled at 25 meter intervals over thousands of line kilometers.

Passive seismic tomography measures naturally occurring seismic events in the earth’s crust delivering similar data – but it takes longer to acquire the data. PST plans to reduce the cost through the development of a simple, low-cost geophone and centralized virtual seismograph system to reduce the cost of onshore seismic acquisition by 10 – 100 fold depending on the individual circumstances of the onshore concession area explored. Like Gyrotek, PST has landed its first UK R&D development partner and the same first customer in the form of a UK-based exploration project in Namibia.

Geodesic (Pty) Ltd

Geodesic (Pty) Ltd (“Geodesic”) addresses the shortage of oil and gas drilling capacity in Southern Africa: It is currently not possible to drill an oil and gas exploration well 4,000 meters onshore, as there is no drilling equipment on the subcontinent able to do this. The cost of mobilizing and deploying a rig to the site was quoted at $8 million (R104 million). Geodesic will exploit the favourable rig buyers market, by buying a 2,000 Horse Power rig capable of drilling 4,000 meters for $2 million (R26 million) in a US distressed debt situation. Over 600 rigs (30% of the total are standing idle in the USA currently and the same rig would have cost over $30 million (R420 million) in 2014. By locating the rig where it is going to be working, it can be mobilized for as little as $200k (R2.6 million).

Other savings and process improvements will reduce drilling costs excluding mobilization and demobilization by 50%. These include using thin well pre-drilling, with a specifically designed blow-out preventer on a smaller mining rig to improve information close to the surface, strategic procurement reducing the cost of consumables such as drilling mud and casing, and localizing provision of services. Like Gyrotek and PST, Geodesic has landed its first UK R&D development partner and the same first customer in the form of a UK-based exploration project in Namibia.

4DVRI (Pty) Ltd

4DVRI (Pty) Ltd (“4DVRI”) is a software company that plans to exploit the emerging area of virtual reality and augmented reality. Using the Unity Platform it will reduce the cost of 3D data acquisition using low-cost Drone-mounted LiDAR and integrating into CAD packages, this technology will develop a number of niche use-cases – 3D/4D virtual immersion rooms for geological planning, engineering, construction projects and property sales.

A second group of use-case applications involved are entertainment and exercise gym applications, where software will be developed for virtual reality in downloadable performances and fitness routines for treadmills. A third involves occupational training simulations and a fourth wildlife VR webcams. Potential customers exist within the Alumni cluster.

Green Paw (Pty) Ltd

Developed by Mitchells Plane-based electrical engineer Fred van Staden, Green Paw’s produce involves retro-replacement of internal combustion engines with electric engines in older cars, mining vehicles, trucks and taxis. With the banning of diesel in Western countries and the more rapid depreciation of new petrol cars in the developed world, this process has the potential to become one of the world’s most important electric vehicle plays.

Competitive advantages that will be created using these budgets include: sophisticated financial engineering to enable customers to convert from a high capital expenditure car purchase to power per mile cost and an internally developed method of integrating existing electronics with the new power bank. A further infrastructure platform could attract billions to support this initiative – especially in the case where the taxi industry embraces the lower operating costs that electric vehicle conversions offer.

Note that the company is evaluating other investments.

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