Q2 2021 - (released August 2021)
SA's quarterly Private Equity & Venture Capital magazine
Innovation, timing and a bit of luck lead to successful exit
by Michael Avery
Amid the adjusted level lockdown blues, we need some good news stories. The founders of local visitor and workplace management system startup, WizzPass, did just that, delivering a shot in the arm when they executed on a massive double feel-good story, delivering a COVID-driven business success, plus that rarest of feats, a South African born startup exit. And while South African tech startup exits are rare, they are less so when they are part of the Knife Capital stable.
WizzPass was founded by Ulrich Stark and Bradley Hornby in Johannesburg, in 2015, and exited to FM:Systems, a US-based provider of digital workplace solutions, backed by technology-focused private equity firm, Accel-KKR in the second quarter.
WizzPass provides a variety of visitor management, parcel management, COVID-19 screening and workspace reservation solutions for corporate offices, industrial and manufacturing facilities, and multi-tenant office buildings and office parks.
Catalyst caught up with Stark to find out more about the phenomenal growth of a company that was born only six years ago, with an idea that he and his partner set out to build into reality: that paper was very 20th century.
“Back in 2015, we had a vision, if you want to call it that, or a gap that we saw, where the paper systems employed in office parks or corporate buildings or industrial facilities, you name it, any type of building, required some kind of manual or paper process, and we thought that was just not good enough,” says Stark.
“We set about digitising the flow of people and things in and out of a building. It has so many benefits around compliance and security, and is a great experience and convenience for everyone involved,” explains Stark. “And so the product quickly evolved from there over the years. And we had a first mover advantage, especially in South Africa. We started to scale around 2019, beginning of 2020, and then COVID hit and the business was the right size to adjust quickly.
While Stark points to his success being influenced partly by luck, the team has worked tirelessly to place itself in the luckiest positions it can find.
In 2016, the startup, then predominantly focused on corporate parking solutions, was selected for Techstars Cape Town. In 2019, WizzPass joined Grindstone – a structured entrepreneurship development programme by leading venture capital firm, Knife Capital and market access specialist, Thinkroom Consulting. WizzPass was one of the top-performing businesses in its cohort. Grindstone is also backed by the SA SME Fund.
“We are fortunate to have had great mentors along our journey,” says Stark. “Fast forward to 2019 and at that stage of the business, we're scaling, we're growing, but as a founder that's also a difficult stage to handle. Fast growth is not always the easiest thing to manage. That's where Grindstone is a great programme, because Keet [van Zyl] and his team have real world experience in fast growth scale. It's very hands on and practical. It's not just theoretical stuff.”
When COVID struck, Stark and his team quickly jumped onto the crisis as an opportunity.
WizzPass was one of the first companies to provide efficient COVID-19 screening solutions for both staff and visitors in one complete system.
This increased their client base exponentially over 2020, and potential partners and acquirers started showing inbound interest.
“And not to say we wanted to make money, but we thought we needed to do something, as we never knew where this industry was going to go. Luckily we did; we expanded our system very quickly to involve private screening for employees and contractors and so on. Suddenly, you could use one system to track all people and all things coming in and out of a facility. In 2020, we were noticed by an amazing company called FM:Systems. They saw our product scaling across multiple continents and they were very interested in chatting to us.”
“We have been welcomed into the FM:Systems team. They're a fantastic company with clients in over 80 countries – 1,500 plus blue chip clients. As a founder, sometimes you've got to take it in and, at this stage, I am very excited to take in knowledge, to learn from these guys and how they manage a company of this size. They themselves are very fast growing, so I'm excited to learn. And you never know in future, maybe that knowledge can be transferred into something new again. But for now, I'm very happy to help grow the system globally and stick it out for now.”
Knife Capital’s founding partner, Keet van Zyl believes its another important milestone for South Africa’s startup ecosystem.
“Earlier this year, we decided to take the business to market. Knife Capital has been leading the process alongside the Founders. FM:Systems is an excellent fit for WizzPass – both from a business culture and ethics perspective, but also their complimentary product suite in the digital workplace, strengthening the client offering. We could not be happier about the outcome for Ulrich, Brad and team! And it is another significant data point for the momentum in the local startup ecosystem.”