VC Investment In Africa: Movirtu Founders Unhappy With Sale To Blackberry

VC Investment In Africa: Movirtu Founders Unhappy With Sale To Blackberry

Written by Rebecca Wanjiku |From  IT World

The recent sale of Movirtu to BlackBerry is fanning an ongoing debate in Africa over the role venture capital plays in companies doing business on the continent.

TLcom Capital more than doubled its $5.5 million cash investment in Morvirtu with the sale to BlackBerry, according to company insiders. Movirtu makes virtual SIM technology designed to let businesses avoid costs when a device is used for both business and personal use, among other purposes.

Though it is headquartered in London, Movirtu up to now has conducted most of its business in Africa. The mobile communications boom in Africa has led to a population that uses multiple SIM (subscriber identity module) cards, and has fueled a wide range of companies offering mobile services and technology in the region. Industry insiders on the continent think of Movirtu as an African business.

“The sale sees TLcom achieve a cash on cash return in excess of two times its initial investment in Movirtu made in 2010, which made TLcom the lead investor and saw the venture capital firm take on a key role in supporting Movirtu in transitioning from idea to mobile identity leader,” said Maurizio Caio, managing partner at TLcom.

In the wake of the sale to BlackBerry, a dispute between the Movirtu founders and TLcom has caused consternation in the African tech community.

The company was founded by Nigel Waller, who originally held 75 percent of the business, and Elena Waller, who had 25 percent. By the time the company was sold, the two founders had exited management and owned less than 0.3 percent.

“We are unhappy and we received, as founders, a check less than a tenth of the salary of the CEO,” Walker said.

The founders are disputing the sum they received in the wake of the sale.

TLcom’s Caio said that the investment firm’s goal is to enhance the value of businesses.

“The goal is to grow a successful business, not mismanage the company,” said Caio. “We bring in capital and team and team is more important than the capital; as an investor, you want to align the team, get the right investment and move forward.”

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