SSL Venture Capital shifts focus from start-up companies Changing business environment blamedFriday, July 10, 2020
SSL Venture Capital Jamaica Limited is shifting focus away from investments in start-up companies as it seeks to reduce risk-taking endeavours, given the changing business environment.
The publicly traded venture capital company is being deliberate in this new strategy moving forward. In addition, the company is being very strategic in the sectors in which it will be deploying capital, with CEO Zachary Harding emphasising that these sectors must exhibit strong confidence “and which we believe possess the greatest opportunities for growth and sustainability, whilst minimising risk”.
In articulating the reasons for SSL Venture Capital no longer focusing on start-up companies, Harding said, “the cycle to get profitability is much longer and this impacts on the company's share price”. As such, the company is focused on businesses with strong and stable cash flow with good prospects for profitability.
The company's main purpose is to take up equity stakes in promising Jamaican start-ups and small to medium enterprises with the aim of realising investments within a three- to five-year horizon. While SSL Venture Capital holds true to its business mantra that access to capital is what is needed for the entrepreneurial ecosystem in Jamaica, Harding argued that the prevailing business environment, which is becoming even more challenging, has caused the company to be more circumspect in its investment decisions.
“We are seeing tremendous opportunity in fintech, hospitality, food and beverage, and environmentally sustainable businesses and we look forward to supporting the right partners with aligned interest in that space. All businesses go through different stages and being our own start-up at SSL Ventures we have been on a steep learning curve and have gone through the necessary challenges to streamline ourselves into a well-oiled machine.”
In his foreword accompanying the company's just released 2019 annual report, Harding said the entity is now identifying “the right businesses that have the potential to deliver positive returns and to create wealth and opportunity for our investors, partners and team members and we can hardly contain ourselves as we prepare to unveil some of the new deals we are working on for 2020”.
The Jamaica Observer questioned Harding about the new functioning of SSL Venture Capital and his new private equity company, Delta Capital Partners (DeltaCap), which is also in the business of private equity financing. He explained that SSL Venture Capital will focus on smaller private equity business ranging from US$100,000 to US$1 million, while DeltaCap will handle deals in the range of $US1 million to US$10-million.
Harding and SSL founder Hugh Croskery Sr recently established DeltaCap as equal partners and owners. The move is part of the ongoing restructuring at SSL, which started over a year ago with the change in ownership and management.
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