Today’s featured members of the VC4Africa community are DEMO Africa 2012 selected entrepreneurs Evan Robinson and Marc Sevitz of TaxTim, providing an online digital tax assistant in South Africa. Last week TaxTim’s tax calculator became the number one searched calculator on Google.co.za, and co-founder Evan was named one of the 200 top young South Africans in 2013! They call on any entrepreneurs interested in licensing TaxTim in their country to contact them.
Please introduce TaxTim, and why it is interesting for investors?
“Our service makes it possible for anyone with web access to complete their own tax return, with the same level of ease and confidence they would get by consulting with a tax practitioner, but at a very low cost. Essentially our business model is to collect a once-off fee per return completed on the system.
Understanding taxes is a big problem in South Africa, people just don’t know where to start and the process is fraught with pitfalls and potential penalties. Most people just avoid submitting their returns, but then ultimately they suffer the consequences. There is a gap in the market for affordable tax assistance and our automated approach allows us to provide this much-needed service at a rock-bottom rate.
Both our low cost and high scalability are attractive to investors, as is our ability to reconfigure the system quickly for other countries.”
How did you find your investors to date, and what would you recommend to other entrepreneurs?
“We approached all the rounds without any expectations, and actually received the funding as offers without actually seeking funding, from all our investors. While discussing TaxTim and what we’re trying to achieve with both the 2nd round and 3rd round investors, they made us offers and we felt that all of them were people we wished to work with and have on board, and of course needing funding it worked out very well.
Find investors you trust and can work with, don’t just follow the money, but consider the mentorship and the non-monetary benefits from having investors on board.”
How do you look back at your participation in DEMO Africa 2012?
“DEMO Africa was a launchpad into African expansions for TaxTim. It gave us exposure to other markets in Africa and also allowed us to see which countries could benefit from the TaxTim service. DEMO Africa also gave us the opportunity to meet with other entrepreneurs facing the same issues and in similar positions as ourselves, which is a great experience. We feel that there is a lot to learn and discuss from those going through the same process as ourselves, and DEMO Africa afforded us that opportunity.”
Besides this we had a great time at DEMO Africa, there was a real buzz between participants, which was energizing and exciting. It was great to see Africans coming up with custom solutions to Africa-specific problems, quite different to the problems that global arena start-ups are working on, but by no means less relevant.
Since DEMO Africa, we have launched the mobile site for our service, secured our third round of funding, had some high-impact, high credibility media exposure, had three international countries approach us for licensing, and two offers to purchase – but we don’t want to sell.”
Would you want to sell your company in the future?
(Smiling:) “Let’s just say when the right offer comes along”
What was the single greatest challenge/obstacle you faced to date, and how did you overcome this?
“Our biggest obstacle has been to figure out how to market something that nobody wants to think about. People in general despise doing their tax returns, and only think about doing them once a year, usually an hour before the submission deadline closes!
We have tried various campaigns on various media that have failed dismally and only now are starting to discover that we get our best results by providing a content-rich experience that attracts people who are actually engaged in the tax return process, counter to trying to broadcast generally to everyone. Search engine optimization is proving to be one of our greatest strengths.”
Which milestones do you hope to reach this year, and what do you hope to achieve with your venture in the long run?
“We hope to have at least one international TaxTim licensee operating by year-end, and many more after that, once we have proven the model works and can be exported efficiently. Any entrepreneurs that are interested in licensing TaxTim as a ready-to-go business machine in their country should contact us via our website.
We are also hoping to complete a direct integration with the South African Revenue Service so as to offer greater convenience for our users. We would like to see people relieved of tax return stress all over the world, using TaxTim from a variety of devices and communication channels, including low cost SMS and USSD.”
What advice would you give to entrepreneurs who are presently considering to apply for DEMO Africa 2013?
“Make sure your start-up has a very clear and very strong business model and solves a uniquely African problem. It needn’t be complicated. And try to find a sponsor who can cover the costs of your trip to the event.”
For more information on TaxTim, see their VC4Africa venture profile. For more information about DEMO Africa, see two previous articles with an “inside look into DEMO Africa: 8 reasons you should apply“, and all application details. Want to launch your product in front of a global audience? Apply to be a part of DEMO Africa 2013!