Hiten Keshave and Sanjay Soni talking to the township economy

Photos: Patrick Furter

“The township economy is 97 percent informal and it’s really where mass amounts of people live in confined spaces.”

CFO CARES

Talking to the township economy

Two less-than-traditional CFOs, Hiten Keshave and Sanjay Soni, share their idea of helping township entrepreneurs who have ideas but lack the knowledge and networks to take those ideas to market. By Ronda Naidu

Abusiness started by entrepreneurs for entrepreneurs. That’s how founders Hiten Keshave and Sanjay Soni describe Qalisa Hub, a start-up virtual accelerator.

“It’s a lonely journey being an entrepreneur. I have lived a life for living and I am now living a life to serve a purpose,” explains Hiten. Sanjay laughingly admits that although he has been a qualified CA for 23 years, he has not practised in the traditional role of a financial officer. “Not even for one day. The notion of entrepreneurship has always appealed to me. I have been in the advisory corporate finance space. I am what may be called a non-traditional CFO,” he says. Hiten does advisory work as a CFO for start-ups. “I do wear a CFO cap, not in the traditional blue-chip type of CFO role though,” he says. The duo met during a SAICA mentorship programme pilot in 2019 and have since formed a solid relationship working with start-ups.

Knowledge and networks

“In October last year, we started to look at how we could have a bigger impact, more than the outreach work we do in our personal capacities,” Hiten said.

That’s when the pair came up with the idea of helping township entrepreneurs who have ideas but lack the knowledge and networks to take those ideas to market.

“When we thought of supporting businesses, we wanted it to be in a meaningful impact area. The township economy is 97 percent informal and it’s really where mass amounts of people live in confined spaces. It is largely untapped and unregulated,” Sanjay says. He explains that people who live in the townships understand the township challenges better than those who don’t. They are also able to solve problems that people in the township face. “With Qalisa Hub, we want to support entrepreneurs in the township to become investor ready.” The co-founders have both been involved in start-ups for decades. It’s no surprise, then, that “Qalisa” means “to start or initiate”.

Social impact

“Given the fact that we are both CAs, we have a professional network and can lean on people. So, this is a high-social-impact project, not a get-rich-quick scheme. It’s finding a way to bring the ‘Sandton capital’ in – not so much the money, but bringing the intellectual capital into the township environment,” says Sanjay.

“With the start-up landscape in South Africa and even Africa, there are very few investors who will invest at the ideation stage.”

“We are not only looking at bringing in qualified professionals as advisors for entrepreneurs, but also people who have at least 10 years’ experience in their speciality fields. The reason for this is that period of time allows a person to gain experience and maturity.” In terms of a business model, Qalisa Hub is focused on paying it forward. “The entrepreneur doesn’t pay us for advice,” Sanjay explains. “Advisors are coming on board on the same basis. Our model commits the entrepreneur to giving us equity, once they have delivered the idea and pitch deck. The equity percentage is split with the advisors and founders at some point in the future. This is not so much about taking equity because it has a lot of monetary value, but about keeping the entrepreneur invested in the process. So, equity is a notion as opposed to a rand value.”

There are lots of incubator and accelerator programmes in the marketplace and Qalisa Hub plans to differentiate itself through being virtual, which allows advisors to come on board from anywhere in the world, focus on experiential learning, and open to any township entrepreneur. Qalisa Hub is open to working with everyone, regardless of race, gender or age. The overriding premise is whether the entrepreneur wants to solve a township-related challenge.

Doing the legwork

“This is not about opening a spaza shop, though. It’s about how township challenges can be addressed differently,” Sanjay says. Hiten adds: “With the start-up landscape in South Africa and even Africa, there are very few investors who will invest at the ideation stage, unless there is a personal relationship or a high-net-worth individual looking at the idea. With Silicon Valley in the US, pre-revenue businesses have done quite a bit of work and market research, and then money is thrown at them to make it happen. South Africa is risk averse and the rejection rate is so high for individuals in search of capital to make their ideas a reality.” Access to capital is one of the barriers to entry for township entrepreneurs, the others being lack of access to technology; no access to skills sets that allow people to think about their ideas and their business, and lack of access to a network of individuals who can bring growth to the business.

Qalisa Hub has received 22 applications to date, seven of which have been onboarded, three of which are in the boarding stage and four that are being reviewed. These include Kompeh, an app to support spaza shops to procure goods at cost-effective and competitive prices; My Female Carpenter, an artisan who refurbishes old wood into second-hand furniture; Woza WiFi, which creates access to WiFi spots in the township districts; and more.

However, Hiten acknowledges that entrepreneurs have money at the top of their list of needs. “We explain that a lot of legwork needs to be done before that. There are ways to start a business without capital injection as the first step,” he says. l

Sanjay Soni