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South Africa’s Knife Capital has invested an unspecified amount of funds in Granite WMS, an easy-to-use barcode-based warehouse management system (WMS) developed by Cradle Technology Services, the VC firm told WeeTracker today.
Granite WMS, developed by a South African automated identification business, integrates into a variety of Enterprise Resource Planning (ERP) systems and accounting software packages, and expands warehouse operations and business processes to help deliver products on time, accurately and cost-effectively.
According to Keet Van Zyl, Investment Partner at Knife, what makes the deal extra special for the VC firm is that Granite WMS is one of the participants at Knife Capital’s Grindstone Accelerator – a structured entrepreneurship development program that assists high-growth innovation-driven SMEs to become sustainable and fundable.
November last year, the VC firm made an undisclosed Series A investment in Cape Town-based PharmaScout, a business that delivers an M2M temperature monitoring compliance solution for pharmacies and doctors licensed to dispense medication in South Africa.
Bootstrapping To Series A
Till date, Granite has been a bootstrapped business, and it has now received a Series A funding from Cape Town and London-based Knife Capital who invests via a consortium of funding partnerships – including SARS section 12J Venture Capital Company KNF Ventures and select family offices.
“Knife’s investment in Granite WMS will enhance business development and marketing efforts to fuel international expansion”, the company said in a statement.
Cradle did not follow the conventional venture capital investment path. It was established in 2000 by Craig and Delia Collins to sell barcode scanners, label printers and labels.
Driven by the needs of their sizeable and growing SME client base, Granite WMS was developed in 2010 with proprietary technology, embracing best practices but reducing complexity for the user.
The business grew from there to become a leader in SME warehousing solutions, focused on integration with Sage 300, Sage 200 Evolution, SAP B1 or as a standalone operation. It is currently implemented in over 100 sites across 3 continents and in over 40 different industry sectors.
“Our ongoing hardware business activities provided the funding, platform and initial market access opportunities to develop and implement our flagship Granite warehouse management software solution,” says Craig Collins, CEO and Co-founder of Cradle.
“We now have enough traction with a robust Software as a Service (SaaS) offering to aggressively ramp up local and international business development and marketing efforts. Knife Capital’s funding is a key growth enabler, but the team’s track record in partnering with local entrepreneurs to scale SMEs for mutual upside is a more enticing prospect than the money,” said Collins.
Cradle To Table
In 2018, Cradle was one of the ten companies selected for the fourth cohort of Knife’s Grindstone Accelerator – a structured entrepreneurship development programme that assists high-growth innovation-driven SMEs to become sustainable and fundable. It is the second investment that Knife has made in a Grindstone company; the other being cloud-based ticketing platform Quicket.
“Investing in Cradle to scale the Granite WMS solution is an exciting business to add to the Knife Capital venture capital portfolio. It already achieved sustainability through its business operations with a blue-chip client base, 35 employees, significant revenue growth and profitability,” says Keet Van Zyl.
“Through our Grindstone Programme we were impressed by Craig’s responsiveness in closing growth gaps identified and the team’s capability to turn sales leads into happy clients. The Granite SaaS product grew aggressively over the past two years, and discussions with grthe entrepreneurs evolved into a workable investment case,” he said.
The market fundamentals are also solid, taking advantage of growth in the e-commerce industry, emerging multichannel distribution channels, globalisation of supply chain networks, increased adoption of on-cloud WMS solutions, and the rising need for efficient forecasting models by SMEs.
According to a Grand View Research, the global WMS market size is expected to reach USD 5.72 Bn by 2025, progressing at a CAGR of 16.3 percent during the forecast period.
But while many warehouse systems are expensive and take considerable time to implement, Granite delivers high end turn-key WMS functionality at an acceptable price-point, making it appealing for mid-sized companies.
Knife Capital continues to invest in high-growth South African entrepreneurial businesses that achieved a product/market fit locally, and then accelerates their international expansion by leveraging knowledge, networks and funding.
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