There is a sense of renewed energy in the South African Venture Capital (VC) and early-stage technology investment sector with the introduction of Section12J funds and the Special Purpose Acquisition Company (SPAC) vehicles arriving on the JSE.
While this is good news for driving innovation and investment, one of the key parts to the South African eco-system is the ability to create secondary markets and “exits” for these high-growth businesses.
The team from Knife Capital are one of the few teams who have consistently driven the development of this side of the equation and they have once again announced a successful exit with orderTalk exiting to US giant Uber.
Uber Eats Acquires SA-Owned Restaurant Technology Company orderTalk
Patrick Eldon – orderTalk
[24 May 2018, Cape Town] Today, South African venture capital firm Knife Capital announced that Uber Eats acquired its restaurant technology HBDportfolio company: orderTalk, Inc. The acquisition enables Uber Eats to streamline workflows by directly integrating with leading point of sale (POS) systems and triggers a significant venture capital exit for Knife Capital and HBD Venture Capital in South Africa. Terms of the deal were not disclosed.
orderTalk is the original provider of online ordering systems for restaurants worldwide offering expedient, dependable and secure online ordering software solutions. Since 1998, the company has utilised proprietary remote ordering software as well as mobile and social media applications to meet the expanding needs of the restaurant industry. This process is seamlessly enabled via proprietary software that is fully integrated with leading POS systems.
The startup was founded by Hilton Keats in 1998 on the back of an online ordering software development partnership with a US restaurant chain. In 2004 lawyer Patrick Eldon joined as CEO and opened the Cape Town head office in 2005. After initial angel investor backing, HBD Venture Capital (owned by internet billionaire Mark Shuttleworth and subsequently managed by Knife Capital) invested ZAR9 million ($700,000) in 2008 to scale the business internationally. While orderTalk initially expanded its technical capabilities in Cape Town, the main client base started growing aggressively in the US and UK. Over the years the core business was relocated to Dallas, Texas.
The VC partnership allowed orderTalk to move from an entrepreneurial startup in Cape Town to a global force. “Raising capital by way of the investment made by HBD provided enormous value, not only in tangible but also intangible terms. The strategic support, mentoring, advice and hands-on assistance received from HBD and Knife Capital over the years of the investment have been invaluable,” says Patrick Eldon, CEO of orderTalk.
The business has shown consistent and phenomenal growth over the past 10 years, recording a 60x increase in revenue since the VC investment, and growing from 5 employees to 27. orderTalk also repaid the initial VC investment via dividends back to HBD, even before the Uber exit.
Uber Eats works with over 100,000 restaurants in 200 cities and 35 countries, so POS integration on a large scale is challenging. orderTalk integrates with more than 10 of the leading POS providers and most major payment processing vendors. Uber Eats head of business development, Liz Meyerdirk, says: “With orderTalk’s engineering talent and the group of people that we’re acquiring, we’ll be able to supercharge our own point of sale integration strategy.” She explained that the acquisition was part of a two-fold strategy: to reduce the amount of errors which can arise with manually entering orders, and to streamline workflow, so that orders are directly fed to the kitchen display monitor or ticketing system.
Knife Capital Investment Partner Keet van Zyl is ecstatic about the transaction. “orderTalk was the final investee company to exit from the ZAR150 million HBD Venture Capital Fund that Knife Capital managed. We have proved that locally developed technologies can have global impact and that one can attain superior venture capital investment returns from South Africa.” Knife Capital also achieved exits to General Electric and Visa from the same HBD Fund. The VC Firm is now backed by the Draper Gain Family Office and it continues to actively invest via a consortium of funding partnerships, including SARS section 12J Venture Capital Company KNF Ventures.
“I’m proud of everything our team has built these past few years,” says Eldon. “We’re excited to leverage our point-of-sale expertise to make Uber Eats an even better partner for restaurants by helping them easily integrate online orders and grow their business.”
Van Zyl adds: “orderTalk set the bar on how to build investor-investee relationships. While it was not always an easy growth path, we all learned a lot, had amazing experiences, impacted lives, made money and formed lasting friendships!”
ENDS
