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Launchlab

It started as an initiative to inspire students to embrace entrepreneurship and within four years, Stellenbosch University LaunchLab became the leading university incubator in Africa and has continued to go from strength to strength in its impact and contribution to the startup community in South Africa. SU

“The LaunchLab was referred to as a world-class facility by Tom Hockaday, who headed up Oxford University Innovation for 12 years.  That was a great affirmation that we are doing it right,” says Anita Nel, Chief Director Innovation and Commercialisation. “It was also named the best campus-based incubator in Africa twice by UBI Global which was a huge feather in our cap. An ongoing highlight is to experience the buzzing “vibe” in the LaunchLab and to constantly see our spinout companies grow and receive investments through their involvement with the LaunchLab,” says Anita.

Brandon Paschal, Deputy Director: Spinout Companies and Funds, said back in 2011, the Stellenbosch Ideas Competition instigated the founding of the SU LaunchLab. Driven by Innovus, dozens of students at SU pitched their ideas during the lunch break on stage at the Neelsie and from there the first seeds for an entrepreneurial SU were planted.

Brandon was part of the LaunchLab leadership from 2015 to 2021 and has recently returned to Innovus to manage the SU LaunchLab into the future.

“Creating momentum for entrepreneurship was the motivation for this early programme, led by Anita Nel, and Philip Marais, who was then Business Development Manager at Innovus. Within two years, the momentum had grown tremendously, and the rest of the SU community had taken notice. There was also a growing need for entrepreneurially minded people to join the growing portfolio of spinout companies under the guidance of Innovus.”

At the SU LaunchLab’s launch event in August 2013, the CEO of the Stellenbosch-based fintech security company Entersekt, Schalk Nolte, introduced Innovus to an executive from Nedbank.  This lead to a valuable sponsorship from Nedbank towards the initial establishment and growth of the LaunchLab to become a key player in the South African startup ecosystem. This sponsorship unlocked seed funding from Stellenbosch University and a substantial investment from the Department of Trade and Industry (DTI). This was the beginning of eight years of multiplying impact of the SU LaunchLab.

Anita says It is essential for any university that is serious about commercialising their intellectual property and supporting their staff and students to build new ventures, to have a proper and well-supported incubator on their campus.

“It is a game changer for entrepreneurship on a campus when there is a dedicated service and facility available to support entrepreneurs in launching their businesses.”

Initially, the SU LaunchLab took up residence in the 400 m2 basement of the Admin A building on campus. In 2015, it moved into a revamped 1 200 m2 building with a team of four staff members and eight companies. Within a year all the office spaces were filled, and the hot desks were buzzing.

Brandon said the launch of SU LaunchLab at its new facility in May 2015 attracted lots of interest from beyond the Stellenbosch community. “Nedbank was quick to activate its partnership with SU LaunchLab through various innovation challenges. As the ball got rolling, several South African corporates lined up to work with SU LaunchLab to try to drive innovation in their industries and get ahead of the disruption curve by partnering with startups. Following Nedbank were several other innovation challenges that SU LaunchLab facilitated for its corporate partners, amongst them the Multichoice-Media innovation challenge, ATTACQ-Retail and Smart City innovation challenges, Santam-Safety innovation challenges, Mercedes-Automotive innovation challenge, and the Nation Builder-Social innovation challenge.

Through these innovation challenges, SU LaunchLab was able to work with Data Prophet, NumberBoost, Cloudline, Spatialedge, Solarturtle, and many others.

From 2015-2019, SU LaunchLab ran eleven innovation challenges for these partners, which brought massive exposure to incubate at SU LaunchLab, as well as to the lab itself. “We were able to work with dozens of businesses through these, in addition to the students at Stellenbosch University and the growing number of spinout companies.”

While Innovus began student entrepreneurship programmes in 2011, it gained much more momentum when student entrepreneurship was given a specific focus by the SRC at Stellenbosch. This gave rise to the SU IdeaSmash.

“By students and for students, entrepreneurship had taken centre stage amongst Maties,” said Brandon. “Shortly after this student momentum spike, the Entrepreneurship Development in Higher Education (EDHE) initiative by DHET kicked off and brought much more attention to student entrepreneurship with its launch in 2019. This brought with it the formalisation of the Entrepreneurship Intervarsity, which is a pitching competition for all universities in SA across several different categories.”

The LaunchLab supports three types of entrepreneurs, namely technology transfer spinout companies (in which the university’s holding entity, US Enterprises (Pty) Ltd holds equity), student entrerpreneurs who establish companies independent from university technology and also external entrepreneurs who want to establish their ventures in the LaunchLab.

Over the years, SU LaunchLab has worked with dozens of students to help incubate their businesses. Basket, Lekkefresh, InforMed, and Adagin, to name a few.

“While all these programmes and challenges were happening, the spin-out portfolio from the technology transfer office, Innovus, was building up steam. Innovus is the custodian of the biggest IP portfolio held by a university in Africa, and from the start, the intent was to establish SU LaunchLab so that their spin-out companies could have a space to launch into and a community of other entrepreneurs to connect with. Quickly, SU LaunchLab was also seen as a hunting ground for VCs and other successful entrepreneurs who were looking to mentor exciting new companies, and perhaps even become angel investors,” said Brandon.

Until 2015 when SU LaunchLab was established in its own building, Innovus was averaging about 1 technology spinout company per year for the previous 5 years. From 2016 onwards, Innovus has been averaging 4-6 spinouts per year. This multiplication of spinout activity can be directly attributed to the awareness and momentum that was created when SU LaunchLab was launched.

Some notable spinout companies that make up this exciting portfolio are: SNC, Custos Media Technologies, Sharksafe Barrier, CubeSpace, TerraClim, and GreenX Engineering. There are currently 30 spinout companies in Innovus’s portfolio, and several more in the process of spinning out.

SU LaunchLab has also collaborated with various partners in other initiatives to help support innovation and entrepreneurship movements across Africa. These include ACE Africa with ICLEI, Startup Namibia, and Makers Landing.

The impact that the student programmes, innovation challenges, and technology spinouts have had has been tremendous. Exciting technology, impressive entrepreneurs, and profitable companies build wealth and create jobs. In addition to the companies that have been incubated through these programmes, SU LaunchLab has attracted other incredible companies that were eager to be part of the movement. Some of those include Mellow Vans, PICSA, ButtaNutt, MzansiGO, and Freedom of Movement.

Brandon says incubators – such as the SU LaunchLab – exist for the companies that they support. “That is simply how the industry works, so incubator teams are constantly pushing accolades for the companies that they work with. From time to time there is an opportunity for incubators themselves to receive recognition for their efforts and impact. University Business Incubators (UBI) Global exists to give recognition to university incubators across the world. UBI Global runs a bi-annual benchmarking study of thousands of incubators from around the world.

This benchmarking study culminates in a World Incubation Summit where the findings of the benchmarking study are shared, and rankings are announced. There is a global top 10 every 2 years, as well as a regional ranking of the top in each region. Through this independent 3rd party benchmarking study, SU LaunchLab was named the top university incubator in 2017-2018, as well as 2019-2020.

According to Brandon, startups that SU LaunchLab has engaged with since 2015 have collectively achieved more than R500 million in annual revenue. This number is incredibly hard to keep track of once companies have “launched” out, so this number may be much higher. Also, in the same time frame, companies that SU LaunchLab has engaged with have collectively raised more than R450 million in investment. This does not consider grant money from innovation challenge prizes or for research purposes.

Brandon says over the next several months, SU LaunchLab will be engaging with current and past companies that they have worked with to unpack more about what it takes to succeed and demystify what it takes to start a successful startup in South Africa.

Where to from now?

Anita says it is important for the University to expand the LaunchLab’s services, especially to SU alumni, and help them start their ventures with our support.

We are also looking forward to linking enormous successes in the startup world to the LaunchLab.  “There are many companies that started as fledgling startups in the LaunchLab who are growing into highly successful ventures – CubeSpace is but one example.  It is also very important for us to add well-equipped and sufficient laboratory space to the LaunchLab.  We see huge growth in biotech startups and laboratory space is essential to support these companies.  It can also become a hub of collaboration with industry.”

It seems the sky is not the limit for Innovus, as they keep on discovering new frontiers and developing the blueprint of a South African entrepreneurial university of the future.

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