By Larry Claasen
RECONSTRUCTED Living Labs (RLabs), a Cape Town-based NGO, has created a R100-million venture capital fund to support emerging innovative businesses that will have a significant social and economic impact.
RLabs, which operates in 24 countries and has had over 200 000 people access its skills training, has long been supporting start-ups since it was founded 15 years ago.
The move to create a dedicated venture unit is the fruition of all the work it has been doing to support start-ups, says RLabs founder, Marlon Parker.
Parker, who will run RLabs Capital says there will be several funds in the unit, like the RLabs Venture Fund, RLabs Seed Fund I, and RLabs Angel Fund III, each with a specific focus on early-stage and growth-stage investments.
He says Rlabs has already sourced R100-million in funding from high-networth individuals based overseas and is in negotiation to get further funding from institutional investors.
The goal is to support 20 start-up businesses with its existing funding, and eventually to grow its assets under management to R1-billion.
Aside from getting funding, businesses will also get access to a range of support on offer from Rlabs like mentorship, back office support, human resources management and graphic design services.
Parker, who was a computer science lecturer before starting Rlabs with his wife Rene, says the aim of the venture funds is to provide support to people who have great business ideas but have never had the opportunity to get backing for it because they came from a disadvantaged background.
He says getting access to this type of funding is hard enough, but these business owners also have the challenge of going into a funding environment that they are unfamiliar with, even if they get their foot in the door.
These barriers to entry are why Rlabs chose to base RLabs Capital’s offices in the working-class community of Westridge, Mitchells Plain. This way when entrepreneurs walk in the door, they are in an environment where they are comfortable in and talking to people who better understand what they are trying to sell.
Parker says the aim is not just to support these businesses, but also to economically transform the communities in which they operate.
An example of this type of ventures is Zlto, an electronic currency that rewards young people for work they do in the community. This currency can be redeemed at 3 000 stores where it can be exchanged for products.
To date it has over 400 000 members, tracked 2,5-million hours of good works, helped 3-million beneficiaries and generated R3-million in transactions.
Zlto is one of RLabs’ highest profile ventures, but there are other ones like Loop, a platform that enables users to haul and pay for a minibus taxi, as well as insure their belongings.
It also enables drivers to streamline their business processes using our geolocation and payment software.
For their part, owners and managers are able to track, and manage their businesses using a web portal and analytics tools.
Aside from RLabs, Loop is also partnering with telecoms group Rain, life insurer Old Mutual and Zlto.
