Mon | Jul 6, 2020

Investing in local start-ups: The second $150 million

Published:Saturday | March 21, 2020 | 12:00 AM

Below is an article from FirstAngelsJa, Jamaica’s first angel investor network.

 

For decades, the Jamaican economy has been charact-erised by perennially low growth and high debt, a combination that has systematically hindered the Jamaican Government’s ability to provide quality services and foster economic growth and development. A challenging International Monetary Fund programme and projections for low growth over the medium term have also presented development challenges for the Government and the country. It is widely agreed, however, that significant growth in the economy will only come from private sector-led, entrepreneurial activities, particularly small and medium-size (SMS) enterprises that have high growth potential.

Although Jamaica has made significant strides in structurally adjusting its economy, access to financing remains a major constraint to expanding job creation by SMEs, as credit providers still prefer traditional collateral-based lending. Venture capital financing has only recently begun to come to the fore as an alternative for entrepreneurs looking to establish or expand their businesses. Several key stakeholders have been working to strengthen the ecosystem for venture financing in Jamaica. These include the Development Bank of Jamaica, collaborating with business owners, universities, institutions in the financial services sector, government agencies, legal and accounting firms, and private sector membership organisations as well as Jamaica’s international development partners such as the Inter-American Development Bank, the Government of Canada, and the World Bank.

Angel investor networks

In March 2014, after a forum discussing the need for angel investor networks, a group of Jamaica’s most influential businessmen and businesswomen decided to get actively involved as well, coming together to form FirstAngelsJA (FAJ), Jamaica’s first angel investor network. Led by Joseph M. Matalon, chairman of the ICD Group of Companies, and supported by J.J. Geewax, chief engineer at the New York City-based advertising display company Invite Media, and Sandra Glasgow, managing director of BizTactics Limited, the framework for FirstAngelsJA was created. A not-for-profit company was registered, a website built, and membership documents created using guides produced by the Kauffman Foundation and later updated by the infoDev programme of the World Bank. Over time, FAJ has refined its investment processes to respond to the realities of the needs of entrepreneurs in the Jamaican ecosystem.

As at May 31, 2017, FirstAngelsJA had invested over $100 million (J$100,995,431 or US$816,543) in six start-up or early-stage companies, also providing vital mentoring and guidance, preparing founders and their companies for the next stage of development. In recognition of the milestone of investing our first $100 million, The Gleaner shared the stories of the first six case founders and their companies.

Since then, FAJ has completed deals with six new founders, leading to a total of 16 deals with 12 companies – including four follow-on rounds, to the tune of J$250,474,721 or US$1,971,882 – as at January 31, 2020.

FirstAngelsJA is now a Pan-Caribbean Angel Investor Network with 39 individual and corporate investor members in Jamaica, the British Virgin Islands and a chapter in the Organisation of Eastern Caribbean States.

We are pleased to present a series of case studies Investing in Local Start-ups – the Second $150m, introducing six new founders and sharing a part of their entrepreneurial journeys so far:

1. SiFi Studios Jamaica Limited: A consumer-facing, digital real-estate technology platform, Keez, that helps consumers easily find properties nearby their locations or anywhere islandwide and obtain mortgages, founded by Ajani Harris Williams and Marvin Whitfield.

2. Herboo Corporation Limited: A manufacturer and distributor of organic shampoos and body oils using local herbs, founded by Javin Williams.

3. Coldbush Organics Limited: Cocoa growers and chocolatiers producing the Mount Pleasant Farms line of artisanal, organic dark chocolates and chocolate products, founded by husband-and-wife team Averell and Hellen French.

4. Powell Interactive Limited (trading as QuickPlate): A restaurant-focused logistics company, currently providing food delivery services in Kingston and St Andrew, founded by Monique Powell.

5. CNC Wellness Company Limited: A diet centre, founded by Janet Rankine-Henry, that offers a range of products and services to its clients, to reduce the prevalence of non-communicable diseases among its target customers. The proprietary products, Meta Balance 360 are vacuum sealed, low calorie, well portioned, pre-packaged meals.

6. PreeLabs Limited: A technology company, founded by Yekini Wallen-Bryan, focused on creating new and problem-solving devices and solutions, including PowerPree – a system that enables users to monitor and manage their electricity consumption, and save money on their annual energy bills.

 

See tomorrow’s Outlook Magazine for the first in the series.