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SIMON BROWN: I’m chatting now with Ayanda Majola from SV Capital. Ayanda, I appreciate the early morning. In a recent note that you put out a point that really absolutely lit up my eyes [was] investments should never be reserved for the elite or the academic. One of the beauties that we’ve seen in the investment world locally and globally is access to a much broader pool of people, and truthfully folks with perhaps less capital. We don’t need to be millionaires to start getting invested.
AYANDA MAJOLA: Morning, Simon. Thank you so much for having me. That’s exactly it. When starting SV Capital, that was the ethos we were centring the business around, where we look to create easy to understand investments that are also affordable. Our goal really was to make investing straightforward and accessible to anyone and everyone, and we did this by centring our product creation around innovative investment products for investors and ensuring that we provide them access to sectors and assets that they wouldn’t really have access to. So really our goal is to re-imagine what an investment portfolio should look like.
SIMON BROWN: That’s a great point because an investment portfolio is going to have some cash, it’s going to have some shares and, let’s be honest, there are lots of ways and places I can get my cash and my shares into my portfolio.
You’re coming in a different one. You’ve got one that really piqued my interest. It’s a delivery-bike investment. One of the things I remember is coming to Joburg in the eighties, and there were tons of these motorbikes because we didn’t have courier companies yet. They disappeared. They’re now back. They’re delivering parcels from Takealot, they’re delivering food and the like, and you’ve got an investment opportunity there that you’ve managed to put together.
AYANDA MAJOLA: That’s correct.
So when looking at the gig economy in South Africa, it has expanded rapidly over the past few years.
I think Covid sped up the process of expansion and we’ve managed to take advantage of the growth of that sector. So through our delivery-bike investors we give investors the opportunity to invest in a fleet of delivery bikes. We apply the concept of fractionalisation. So essentially an investor is participating alongside another investor, and we pool and club those funds to purchase a fleet of delivery bikes.
The delivery-bike investment is an 18-month investment. So over that period the bike is given to a third-party rider who would normally be contracted to your larger platforms that are operating in the South African markets, and the riders would do your normal delivery. So it’s very similar to how you would’ve ordered some goods online and have them delivered to you. The guys that are doing those deliveries need those assets. So through our delivery-bike investment, we are then participating in assisting those guys to have assets to execute their job on a daily basis, while generating a positive return for our client base. So the investment return on the delivery bike investment is currently sitting at 19.25% over the 18 months.
SIMON BROWN: Obviously it’s a pool, so I don’t have individual risk. And then the delivery driver is managing the insurance, the maintenance and paying a fee – or do you manage that from your end?
AYANDA MAJOLA: We manage it on our end. We work with an experienced and established partner, a company called On Fleet, and they essentially manage our fleet for us. So they would source the bikes, source the riders, and also provide insurance and servicing of the bikes, because we like to say that the value of the bike is only maintained if you maintain that bike over the 18-month period.
It’s also important to mention that how we’ve structured the delivery-bike investment is that we have given the rider a rent-to-own option for the delivery bike. So what this means is the rider would be renting it over an 18-month period and thereafter they would gain ownership of that asset. This is very important because at least now we are not only generating a positive return for our investors, but also creating sustainable employment by giving the asset over to the rider.
SIMON BROWN: I take your point. That’s taking investment perhaps to that next level, which is not charity but investing for good, while still actually managing to make profit – which perhaps is the perfect point of investing, making money and helping.
AYANDA MAJOLA: Exactly. And I think the investment space is moving to that place where returns are not only prioritised. Yes, they are important, given the tough economic situation that we are going through. So every person wants to ensure that whatever they’ve put their money in does generate a positive return or at least an inflation-beating return.
But in addition to that, at SV Capital, we want to encourage conscious investing, ensuring that wherever you put your money there is a positive social impact that comes from that. And through the delivery-bike investment to date we’ve been able to successfully create 300 jobs in the country.
SIMON BROWN: And that’s even more important.
We’ll leave it there. Ayanda Majola, SV Capital, I appreciate the early time.
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