4Sight brings together digital entrepreneurs looking for path to stock-market validation
4Sight Holdings, which bills itself as a technology pioneer in fourth industrial revolution, is planning to list on the JSE’s AltX next month, and is hoping to raise R300m from investors – presumably those who are comfortable with concepts such as bioinformatics, econometrics, artificial intelligence (AI) and block chain.
Business Day spoke to its co-founder and CEO, Antonie van Rensburg.
Warren Buffet exhorts us to invest in businesses we understand … if you had to explain yourselves to a simple retail investor, what are you?
4Sight invests in Industry 4. So the fourth industrial revolution is turning your physical world into a digital one through sensors, data analytics, etc. Now we acquire companies that create intelligent algorithms in those digital worlds which allow you to make better decisions — whether you need to make more money, increase productivity — those are the type of algorithms in which we invest.
To give you a practical example, our main acquisition that we’re taking to market wrote an algorithm on a telecommunications network that allows people to get better pricing deals.
Are you buying the technology, or developing it too?
We are buying the companies with the tech. Because it’s such a fast-moving environment, we’ve got to purchase companies that have already built platforms and some of these technologies. My future vision is that 4Sight will, with the listing, be involved in smart communication networks; digital media, and we are building a platform around smart homes and smart buildings.
Our next set of acquisitions will focus on smart factories, then we’re going to move into financial services, agriculture and healthcare. Each of those verticals will have their own specific functions, expertise and the way people run technologies inside those businesses.
Most of these engineers and scientists have been doing this for 10 years. They have the ability to deploy technologies such as machine learning, AI, block chain – all the stuff you read about. We’re bringing all these people together in those vertical applications.
What is your background?
I did my PhD in engineering in 1996, around the ability to translate a physical world into a digital world … so I was about 20 years before the technology enabled us to do that. About two years ago, nobody talked about Industry 4, nobody talked about digitisation of businesses, we were only [starting] to be exposed to Uber … and I’ve been trying to make these things work in the past 10 years. We’ve been creating a data analytics company that builds bespoke solutions for customers.
So, we saw this wave coming and, in the past year, we’ve seen an explosion in terms of people talking about digitisation; all the executives now have this on their strategies. We’ve tried to create partnership models with a lot of companies. About six months ago, I said to my mergers and acquisitions partner, we’ve got to bring these things to the market right now because everybody wants to do this, but there are very few people in the market who understand it.
Taking this to market was the only way I could really convince most of these tech companies to join up with us.
Indeed. Why do you need to be listed at all?
Most of the companies we have acquired have also been approached by the EOHs, the Didatas, but none of those guys could offer them, I think, a vision where they could bring all these components together. Second, all the guys are entrepreneurs, they are technically orientated.
That’s what I can bring to the table. I can talk to these guys, understand what they do. It’s quite amazing to put a chemical engineer next to a radio engineer and see the interaction. For example, a chemical engineer and a mechanical engineer developed an AI system that could predict failures in a production process, but a radio engineer says I can use this technology to predict when a base station might fail. That’s what we brought to the table.
How are you going to raise the R300m you’ve targeted?
We’ve [completed] the initial funding for the listing – myself and two partners. We’ve raised R20m, and then we’re doing an initial public offering (IPO). Our prospectus will be approved by the JSE on Monday and we’ll go through an IPO process over the next four weeks and list in the first part of October.
Have you got any institutional backers lined up?
We’ve already done presentations [to fund managers], as well as to individual technology entrepreneurs. Because its initial market cap will be about R1bn, it does restrict the large institutions to invest.
How do you arrive at a R1bn market cap?
[We’ll have] just under 500million shares at about R2 a share. We did our first acquisition in July – we bought a company called Digitata, an international analytics company. It has about 40 telco operators as clients and 90% of its income is dollar-based. It’s based in Mauritius, and we’ve also established 4Sight Holdings as a Mauritian company. Our next set of acquisitions [are] in mining and manufacturing and most of the revenue also comes through Africa, Australia and the Americas.
Is Digitata profitable?
Yes, it’s profitable. All the businesses we have acquired are profitable. They all typically earn 50% of their revenue through licensing agreements.