Country: South Africa
Vallabh says he always wanted to run a business but it was his last few months at Bain, a global management consulting firm, that crystallized his ambition.
“I was working with a multinational fast-moving consumer goods (FMCG) company, refining their strategy with complex analysis of their pricing, distribution, and marketing. During that time, my uncle, a small business owner, causally mentioned issues he was having in those very same areas,” he says.
It was in that moment that he realized the work he was doing for large corporates would be better served at the SME level.
“We could provide tremendous value to SMEs in South Africa and across the continent, to help accelerate their growth, create jobs, and build the next great African company.”
Vallabh and co-founder, Brendan Mullen, created Secha Capital, an impact investing holding company that provides patient capital to established African SMEs via innovative strategies. Secha Capital addresses the management gap in SMEs by aligning the interests of investors with business owners through sweat equity and performance-based vesting options.
They bootstrapped the first year’s investment.
“This came from a combination of savings and family. Having started from nothing after paying off my MBA debt, I religiously saved for the next few years, planning for future investment opportunities. Secha was that perfect opportunity in which I could invest,” he says.
The company invests in established South African agribusinesses and FMCG SMEs with revenue between $370,000 and $3.7 million.
“We have raised $3 million and have structured our investment vehicle as a section 12J company – a South African tax authority initiative to promote investment into SMEs,” says Vallabh.