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Johannesburg - The JSE-listed investment fund operated by the Rupert family has committed R200m in capital to South African web entrepreneur Vinny Lingham's SynthaSite .
SynthaSite is described as a do-it-yourself website and blog development tool developed by Lingham, who now operates from San Francisco.
The company said it plans to use the capital to accelerate the development of its website creation tools and peer-to-peer e-commerce platform. It aims to do this through organic growth and strategic acquisitions in both its San Francisco and Cape Town offices.
Lingham told Fin24.com that the original "A" series financing came from under the Richemont structure through the Columbus Venture Capital fund, but the investment and additional "B" financing had subsequently been moved under the Reinet vehicle.
"In terms of value add, Reinet has been a world class investor," said Lingham.
The "A" financing amounted to $5m, which was committed in November 2007.
"What sets SynthaSite apart is its vision and management team," said Frank Vivier, chief investment officer of Reinet Investment Advisors.
"The team's unique combination of technology, business expertise and proven track record makes me confident that this company will be a big success story."
Vivier said: "Great companies are built during turbulent times."
"SynthaSite is maturing according to plan," said Johann Rupert, executive chairman of Reinet Investments SCA. "This next phase of execution will be both challenging and interesting, and Reinet and SynthaSite together form a strong partnership to meet those challenges."
'South African hues'
Reinet has caught the eye of South African investors since listing, being described by some industry experts as the "Rupert family hedge fund".
The company was created in late 2008 after a restructuring of Richemont and Remgro assets. Investors have bought into the company in the hope that it will allow them access to the deal-making abilities of Johann Rupert.
Analysts, however, have been waiting to see what kind of deals Reinet would be participating in to give them a better feel for the strategic direction of the business. In January Reinet confirmed it would invest in private equity entities belonging to fallen financial giant Lehman Brothers.
Despite moving off-shore, Lingham believes the company retains its South African heritage and culture.
He said: "SynthaSite has very strong South African roots and we will continue to invest in our Cape Town office; our investment model has demonstrated the value of South African companies that have a global focus combined with a strong South African presence. In terms of skills, product and culture we're a mixed bag of people with strong South African hues."
Lingham believes that venture capital in the South African market is entering an exciting phase. "I think it's the next frontier for Venture Capital; it worked in the US, it worked in Israel, it needs to work in South Africa - we have the people with the skills, vision, drive and talent.
"They just need the capital and they can make great things happen. It may take 10-20 years - but it will happen, in my opinion."
Reinet was trading down 0.6% (6c) at 944c on Wednesday.
- Fin24.com
