The Evolution of Savant’s Investment Strategy: From Incubator to VC Firm
Savant Venture Fund 1, South Africa’s primary deep-tech, science & engineering venture fund, has evolved its investment strategy over the years. Founded in 2004 by Nick Allen and Kate Turner, who have backgrounds in civil engineering and bioscience, respectively, Savant initially focused on supporting businesses in life sciences. However, they soon expanded their scope to include engineering and industrial sectors, aligning with their core skills in science and engineering. The shift towards deep tech investments became evident when they launched their fund four to five years ago, transitioning from an incubator to a venture capital firm. This evolution has been influenced by the increasing integration of software and hardware and the expanding role of technology in their portfolio. Savant now aims to support innovations by providing the foundational elements that empower future software developments.
A Success Story in Hardware Tech: The Growth of Sensor Networks
Sensor Networks, a portfolio company of Savant, is a success story in the hardware tech space. The company has gained significant traction due to its unique approach and customer-centric strategy. Sensor Networks addresses pain points for both institutions and end-users, attracting two distinct customer groups. One of the key factors contributing to their success is the leadership of senior entrepreneur Mark Allewell, who has exited three ventures before. The company’s customer-centric approach, which involves engaging with potential customers and adapting their solution based on customer feedback, has been instrumental in their growth. By aligning closely with the needs of their initial customers and incorporating their desired parameters and solutions, Sensor Networks has developed a scalable product and gained a competitive edge in the market.
Advantages and Disadvantages of a Dedicated Deep Tech VC Firm
Being a dedicated deep tech, science & engineering VC firm like Savant has both advantages and disadvantages. On the positive side, having over 20 years of experience in their specific vertical enables Savant to identify potential red flags and nuances that may not be apparent to others. They can serve as a resource for individuals evaluating companies outside their expertise and provide a unique perspective that can lead to investment opportunities. Additionally, being a prominent player within their niche positions Savant as a key authority in the African market, allowing them to capitalize on the growth within this specialized domain. On the downside, the focus on a specific niche limits the opportunities they can explore and also makes it challenging to find co-investors for certain deals. However, Savant has been able to navigate these challenges by actively seeking co-investments in the early stages.
The Build Programme: Investing in Post-Revenue Hardware Startups
Savant’s Build Programme plays a crucial role in building a robust pipeline of investable startups. The programme focuses on post-revenue hardware startups that have demonstrated market validation and tangible sales. By actively contributing to the evolution and development of these startups, Savant aims to guide them through addressing key issues and making them attractive for commercial funding. The ultimate goal is to create a pipeline of ventures that have a solid foundation and a viable path to success. Even if Savant is unable to invest in certain companies by the end of the programme, these ventures will still be better positioned for success with other investors.
Common Pitching Mistakes Entrepreneurs Make with VC Firms
Entrepreneurs often make common pitching mistakes when seeking funding from VC firms. One of these mistakes is failing to clearly state their company’s valuation. Transparency is crucial in establishing trust and open communication between entrepreneurs and VCs. Another mistake is presenting projections labeled as conservative without accounting for growth opportunities. VCs often discount these projections regardless, so it may be more effective to present an ambitious yet realistic projection that showcases the company’s potential success under optimal conditions. Additionally, entrepreneurs should be mindful of maintaining professionalism and effective communication throughout the pitching process.
Analyst comment
Positive news:
– Savant Venture Fund 1 has evolved its investment strategy over the years, expanding its scope to include engineering and industrial sectors, aligning with their core skills in science and engineering.
– Sensor Networks, a portfolio company of Savant, is a success story in the hardware tech space, gaining significant traction and attracting two distinct customer groups.
– Savant’s Build Programme plays a crucial role in building a robust pipeline of investable startups, guiding them through addressing key issues and making them attractive for commercial funding.
Neutral news:
– Being a dedicated deep tech, science & engineering VC firm like Savant has both advantages and disadvantages.
– Entrepreneurs often make common pitching mistakes when seeking funding from VC firms, such as failing to clearly state their company’s valuation.
As an analyst, the market is likely to respond positively to Savant Venture Fund 1’s evolution and success stories in the hardware tech space, as it demonstrates their ability to identify and support innovative startups. The Build Programme also positions them as a key player in building a pipeline of successful ventures. However, the market may be cautious about the challenges and limitations of being a niche-focused VC firm and the common pitching mistakes entrepreneurs make.