South African-born tech entrepreneur Vinny Lingham is looking to use part of the $33 million (R445 million) windfall his company recently raised to make investments in SA.
Last month, US start-up Civic, founded by Lingham, sold $33 million in digital currency tokens for its identity verification project in a public sale.
Lingham, now based in Silicon Valley, is an Internet entrepreneur and co-founder and CEO of Civic - an identity protection and management start-up.
He previously founded and was CEO of Gyft and Yola, and is co-founder of Silicon Cape, an NGO based in SA that aims to turn Cape Town into a technology hub.
Lingham also founded and was previously CEO of global search marketing firm incuBeta and its subsidiary Clicks2Customers.
In an exclusive interview with ITWeb yesterday, Lingham said Civic is looking to set up an office in Cape Town. "We are opening an office in Cape Town and we are looking to invest back home."
Relaxed controls
Previously, he had challenges opening shop in SA because of the unfavourable intellectual property control regulations set up by the Reserve Bank. Now the laws have been relaxed to allow for more investment by foreign companies.
"The Reserve Bank changed some rules for us to be able to open an office in South Africa. Previously, because I am a South African citizen, if I opened my company in South Africa, it would have been in violation of these regulations. This law prohibited South African citizens from being shareholders of a foreign company. They [Reserve Bank] recently realised it was a very old apartheid law which did not make any sense.
"It was preventing expatriates from putting money back in South Africa, and after a lot of discussions, they relaxed that law."
South Africa has amazing technical talent so I am sure we will find top technical talent. - Vinny Lingham
He isn't sure how many people the South African office will employ. "There is no number but we are looking to hire the best people that we will find. There is no office yet and we are still looking for premises but there are some people already working on contract."
Lingham said he is not looking to hire sales people in Cape Town at the moment but rather some developers, as he believes SA has a lot of talent.
"South Africa has amazing technical talent so I am sure we will find top technical talent. Because the rand is weak, the market prices in SA are a lot lower than in Silicon Valley, so to build up resources there makes sense.
"Obviously, as a South African, I want to contribute back home. If I can find world-class talent in South Africa, then I can build an office for tens or hundreds of people to develop the Civic platform and build the company into a global powerhouse. I am not looking to invest in sales people to try and sell the technology to the South African market because I don't have the time and resources for that. The process to do that is just very slow."
Slow pace
The main reason Lingham is not too keen to be selling Civic technology locally is he believes the South African market is too small, with regulatory complexities, and there is a general trend of South African companies taking time to adopt new technologies.
South African regulators need to catch up with what is happening in the technology space, said Lingham. "In the US, we are working with big banks, big partner clients and governments across the world using our technology.
"However, in South Africa, things move slowly so we will mostly focus on growing tech talent from the country and making sure we have local resources while we are building a global footprint. We are not here to chase the South African market because it is small but we are here to support it. South African companies are also slow in adopting technology. So, as a start-up company, it takes time to chase these kinds of deals in South Africa."
So focusing on the US market is the core of the business for now, he stressed.
According to Lingham, in SA, the sales cycle for any product is much longer than in the US. "In the US, you get a deal done in a month but in South Africa, doing business is actually tough. No one wants to make decisions, and it can take months and months or years before a deal is concluded.
"The good thing is that we think our technology is good enough and we believe it will start getting traction with time. It will, however, take time with all those regulators. That's one other reason why South Africa tends to trail the rest of the world in regards to technology adoption. It's a lot harder to make people do stuff in South Africa.
"We have had conversations with some of the banks in South Africa but things do not just move quickly."
Identity protection
Civic is an identity management service that allows users to protect and authorise the use of their identity in real-time.
Lingham believes the technology can be useful in fighting crimes like identity theft and SIM swap fraud that are rampant in SA.
"Civic will alert users through e-mail and mobile notifications when someone is trying to use your identity to open a new account. These alerts are sent in real-time, allowing you to respond immediately and stop identity theft before it happens."
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