IPOXCap is a fintech company based in South Africa. It is focused on making investment banking and financial advisory services accessible to startups. The company is reducing friction by leveraging data to automate the provision of these services. IPOXCap is the first startup from Africa to join the FinTech Sandbox Data Access Residency. We asked Phiwa Nkambule a few questions about his background and the company.
Q. Phiwa, please tell us a little bit about yourself and your background.
A. I was born in 1992 in the Kingdom of Eswatini (formerly Swaziland) but spent the last and better part of my childhood in South Africa. I learned how to code through online tutorials while an economics and law student at a South African university in 2013. I founded my first tech startup, Cybatar, in 2014 at the age of 22. I then co-founded my second tech startup, Riovic, a fintech company in 2015 at the age of 23. Riovic was one of the pioneers of P2P insurance, with networks and collaborations with other P2P around the globe. It was also one of the pioneers of fintech, especially insurtech in South Africa.
The work and achievements through Riovic led to my recognition in the Forbes Africa 30 under 30 list in 2018 and my profiling in the book Entrepreneurs Who Changed History in 2020, among many others.
Q. Tell us a bit about your company. What problem are you trying to solve?
A. IPOXCap will simplify deal execution by building technology that will use macroeconomic and transaction data to generate country multiples and industry multiples which will usher in an era of risk-adjusted valuations and financial projections for private markets.
I founded IPOXCap in collaboration with individuals identified with skills in areas our primary target users needed to access. Primarily our focus was making advisory services accessible to startups but then we realized the difficulties in deal execution went beyond startups. The traditional methods used to determine the value of a company do so without considering external economic factors which means valuations and financial projections are either underestimated or overestimated. This prolongs the deal process as investment analysts would be required to do a lot of work to validate the models.
Q. Who’s your target market?
A. Our target market is the private market ecosystem. It is entrepreneurs, startups and private companies on one end and financial institutions and individuals that invest in private equity on the other end.
Q. What’s the story behind your company? How did you come up with the idea?
A. I worked for Startupbootcamp, an early-stage VC and accelerator, as an entrepreneur-in-residence where I provided guidance to portfolio companies and I also worked for the Royal Science and Technology Park, a government owned innovation agency, as a director. The experience from my time in these two entities is what led to the formation of IPOXCap. My observation was that startups which wouldn’t be able to get into an incubator or accelerator would struggle to ever get investment ready or to produce an investable business plan.
Q. What milestones have you achieved thus far?
A. Our greatest milestone so far has been our acceptance into FinTech Sandbox which solves two problems for us at this stage: one — access to quality data providers for our product, and two — a foot into the American tech ecosystem which is the most vibrant in the world. On top of this we completed our market study and beta testing with our MVP in May.
Q. Do you intend to become a provider of data yourselves?
A. IPOXCap intends to be a provider of data on startups and private companies in under-covered markets like Africa. We also intend to be a secondary distributor of the data we use for our models.
Q. What’s next for IPOXCap?
A. We are working on our capital raise and starting to market our proposition to the VC and private equity market.
Q. What can you tell us about the fintech ecosystem in South Africa?
A. The South African FinTech ecosystem is still an emerging but very organized ecosystem, supported by strong regulatory bodies and licensed financial institutions. Because of difficulties in accessing licenses for regulated services and products a lot of financial institutions are open for collaboration with startups.
Q. What makes you most excited to join FinTech Sandbox’s Data Access Residency and community?
A: The FinTech Sandbox’s Data Access Residency opens doors to companies that wouldn’t be interested to talk to a startup, especially one in an emerging market. Some of the members of the community have already reached out offering to assist with some of the goals of the company. This excites us because it has elevated our chances of succeeding in the product and service we want to bring to the world.
