Hedging bets with start-ups

The investment in Simply is part of the plan which saw Yellowwoods put R20m into Naked, an online car insurer

Not all investment companies would fund a potential competitor to their core businesses, but this is exactly what Yellowwoods has done by taking 15% of insurtech firm Simply.

Yellowwoods is the secretive SA holding company of the Enthoven family. Its main interests are Hollard, with about R24bn in premium income across short- and long-term insurance licences, and Clientèle, a highly profitable but niche life office with R2.1bn in premium income. Neither has been a slouch when it comes to innovation — Clientèle, in particular, was an innovator in the direct-to-consumer market through its cheesy but effective TV infomercials.

But the Enthovens are always looking to the next generation.

The founder of the dynasty, Robert, made his name in insurance broking. His son Patrick moved into underwriting when Hollard was formed in 1980. And more recently the family have moved outside their insurance comfort zone by financing Nando’s, run by Robby Enthoven in the UK — which has been highly profitable — and the Spier Wine Farm, which, given the economics of that industry, looks like more of a fun project. It is run by Robby’s sister, Mariota. The third sibling, Adrian, runs the serious side as executive chair of Yellowwoods and chair of Hollard.

Scott Gilmour, an investment manager at Yellowwoods, says the investment in Simply is part of the same strategy which led to a R20m investment in Naked, a start-up car insurer, which has chosen to work from part of the Hollard campus in Parktown, Johannesburg.

Simply, which has been going for two years, will stay in Claremont, Cape Town.

“By investing in early-stage businesses we can be alert to the changing landscape,” says Gilmour. Hollard and Clientèle have retained an