The South African economy needs the dynamism and growth potential that early-stage innovative companies have to offer and venture capital investments provide the funding that supports the growth of these entrepreneurial engines of economic growth, fixed-interest asset manager Futuregrowth Asset Management says.
It highlights that it is eager to participate in the potential returns offered by these companies and that it has been making selective venture capital investments into businesses that it believes offer distinctive business propositions and strong growth opportunities.
The company makes these investments through the Futuregrowth Development Equity Fund (DEF).
In May, DEF invested in LifeCheq, a digitised holistic personal finance business that aims to make expert advice accessible to professionals and entrepreneurs who are currently not served well by the existing financial advice industry.
“What we most liked about LifeCheq is that it has taken something like personal finance, which can be complex and as a result easily avoided, and uses technology to offer a financial service in an attractive way to a far broader market,” says Futuregrowth unlisted equity transactions head Amrish Narrandes.
The business has two target markets, mainly individuals for their personal use; and employers, who are interested in offering their employees a financial wellness programme.
These potential markets give it diverse sources of revenue and expand the reach of the business across a variety of individuals and company employee bases, says the company.
Futuregrowth notes that LifeCheq's competitive edge is that it tailors and personalises financial advice to suit different individuals with different risk profiles by using data and algorithms to generate solutions.
Narrandes notes that LifeCheq more than met Futuregrowth’s investment requirements.
“We also took comfort from the fact that the business had already built up traction and had proved its credentials and, as a result, we bought into the business vision and proposition,” Narrandes says.
“Most importantly, the business has an impressive management team, with all the credentials and experience to qualify as an A-team. The four co-founders and members of the executive management team have a diverse range of experience from financial services product design to software engineering,” says Futuregrowth investment analyst Kearon Gordon.
LifeCheq aims to become the primary way in which clients engage with their finances and navigate their most important life decisions.