Early Stage Seed funding: What we can learn from Finnish partnered funders COFISA and SAFIPA

Early Stage Seed funding: What we can learn from Finnish partnered funders COFISA and SAFIPA

While in Asia and seeing the incredible growth opportunity for both RLabs and JamiiX in this context I was reminded of how the journeys for both these initiatives started and why early stage support and seed funding are of vital importance for start-up organisations.

In 2008 while RLabs was still operating as a community project a Finnish and South African Department of Science and Technology partnership programme COFISA was approached to assist our project with donor funding for development of a business plan and a feasibility study. The key aspect of this early support was the realisation that the community project that we started needed to be formalised and we saw the opportunity to expand it beyond just South Africa. The seed funding received was R460,000 ($65,000) and if we review the impact of this investment the following are some of the highlights that has been achieved:

– RLabs was established as the first Living Lab in the Western Cape region of South Africa
– RLabs are now a global movement with representation or activity in 6 countries
– Current number of people served via RLabs have reached more than 300,000
– More than 1,200 people have received training and development and the establishment of the RLabs Academy
– The birth of an Innovation Incubator with 7 Community Startups were started with one formal for-profit company currently employing 6 people.
– Full time staff of 12 with more than 50 volunteers
– Establishment of a Research Institute and partnerships and collaboration with 18 universities globally
– Won 3 South African Blog awards and runners up in an International Social Media Award
– Have empowered more than 50 non-profits with training or services
– Providing services to Provincial Government, World Bank, World Health Organisation and other large organisations.

If the above is valued then the ROI for that initial R460,000 ($65,000) is massive and a good example of what impact a small investment can have through a well positioned start-up.

Out of the activity through RLabs a new technology, JamiiX, was birthed and a start-up company was formed. Although in its early stages some seed funding was required to get the business setup and to commercialize the product offering. With seed funding and early stage funding being very difficult to raise it was with great vision that the South African Finland Knowledge Partnership in ICT (SAFIPA) came on board to provide our startup company with some seed funding to kick start the business. The investment was R1.4 Million ($200,000) and the following were achieved due to the invaluable contribution of SAFIPA:

– Formal company structure established
– Team growth to 6 staff members
– Currently have more than 300 registered members of JamiiX supporting over 300,000 users
– Launched JamiIX in South Africa, United Kingdom, Europe and South East Asia
– Partnerships established in 4 countries
– Development of Revenue Model
– Established the JamiiX brand
– In collaboration with RLabs and other organisations providing LIVE counselling and social support to thousands of people at risk
– Commercial product released
– More than 150 people trained and developed in the area of mobile support

The above is another indication of how SAFIPA’s seed fund contribution have made a massive impact and many of these things would not have been possible without them taking that risk.

So three lessons we’ve learned from having Seed Funding partners:
1) If that seed funding was not available both RLabs and JamiiX might not have been able to achieve what it did in such a short period of time.
2) Seed funding is valuable for building and taking to market or creating a market. Both JamiiX and RLabs have created markets that were not available before and the risks taken by COFISA and SAFIPA are validated in what have been achieved thusfar. An indication is that these contributions combined have allowed us to reach 300,000 people with much needed services in a number of countries at $0.88 per person and training and development of over a thousand people through the RLabs Academy.
3) Knowing that it is only a temporary cash injection have brought us to a place where we developed stricter revenue and sustainable models for both our RLabs and JamiiX activities.


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