Entrepreneurial Stellenbosch University showcases its entrepreneurship and innovation successes

Stellenbosch University is recognised for its success in entrepreneurship, a journey that requires continuous innovation, planning, commitment, training, partnerships and top leadership support.

She started by painting the picture of the African continent, where 50% of the population is younger than 20 years old and where, out of 1,3-billion people, only 40% of 20 to 24-year-olds have secondary education.

“If you look at Africa’s vision towards 2030, innovation underpins the rising living standards through improved economic productivity, faster private sector development and job creation,” she said, adding that creating better paying jobs and lower operating costs could improve political governance by creating wealth in Africa’s informal sector and outside the continent’s traditional mining and oil sector.

Universities in Africa, she said, could play a significant role in supporting entrepreneurship to become economic growth agents in the region, starting and growing new ventures.

“At Stellenbosch, commercialisation and entrepreneurship sits within the award winning InnovUS unit. All the university’s fifth stream income is housed within this division,” she said.

There were various subdivisions, including Short Courses, Trademark, Technology Transfer and the university group of companies, SunCom (that included university residences, the dairy and botanical gardens). “We have a wholly owned subsidiary called US Enterprises that was structured to hold the shares from the university group of companies.”

Ms Singh said the entrepreneurial university had the ability to innovate, to recognise and create opportunities, take risks and respond to challenges. “It sells its services in a knowledge industry and is a national incubator that supports its academics, technicians and students to create new ventures. That’s very important when you look at South African universities where it is often challenging to take on risk.

“Within our entrepreneurial ecosystem, we often say that working at InnovUS is entrepreneurship in action. We help and equip our researchers and students with various support structures and tools to help them on their entrepreneurial journey.”

Four structures support entrepreneurship and form a collaborative initiative within Stellenbosch university:

• InnovUS: Technology Transfer with the tradition of transferring technology and starting new companies or licensing technologies from the university based on Intellectual Property.
• University of Stellenbosch Enterprises: A wholly owned subsidiary of the university that holds the shareholding of the university’s group of companies.
• LaunchLab business incubator: helps incubate startups and has been named one of the leading incubators in Africa. It provides support not only to university entrepreneurs; but all within the ecosystem who need incubation.
• SunCom: This company works with non-university-related IP that relates to commercialisation.

“Among the platforms designed to support entrepreneurs, we have a spinout information guide – an e-book available to all our researchers and students, which explains the process of Technology Transfer. We’re about to launch our instant startup toolkit – an e-platform that provides tools, forms, documents, and videos for Stellenbosch University’s entrepreneurs.”

The university has a translational fellowship programme for PhD and Masters students that gives them the opportunity to translate their research into a business or a product. This programme has a membership network that brings together entrepreneurs, industry, government and universities.

Some of the initiatives supporting entrepreneurship within Stellenbosch:

• The entrepreneurship bootcamp, an annual two-day event where students from all over the university gather to share and define their idea to see if it is a potentially viable business.
• The annual Stellenbosch hackathon, an annual initiative between industry, the university and the LaunchLab where students and industry come together to solve fintech or data science challenges.
• The last Friday pitching session: Entrepreneurs bring ideas that a range of key role players in the entrepreneurship environment listen to, offer advice and help.

Ms Singh said that every startup needed funding and Stellenbosch’s funding structure includes:

• The University technology fund, an R2-million fund – the first on the African continent for private investment specifically focused on university technology.
• The Technology Innovation Agency. “It always supports us with the barrier to entry for early-stage technologies”.
• National Intellectual Property Management Office (NIPMO) support fund helps us with techno-economic evaluation
• The Stellenbosch University Investment Committee invests in our more mature startups.

Ms Singh said some of the current Stellenbosch research teams had started spinout companies that ranged from engineering and agri-science to medtech. Listing some of the companies they are spinning out, Ms Singh said there was a product from a phyto-pharmaceutical company and one from a school shoe certification company.
“Our South African feet are very unique,” she said. “This is a company that is going to help us understand that.”

There was also a spinout company for long-CoViD diagnostics.

“Considering all these initiatives, how do we know that we are making a difference? We are in the process of starting spinout companies for two of our student entrepreneurs, one of whom is solving a specific problem within the university – digitising our access cards system; while the other has designed an app that logs and monitors faults from residences on campus.”

She said that two students who attended the annual bootcamp started an online gift business from the skills learnt there. “After our hackathons, students have been given internships and employed by industry. There are great opportunities,” she said.

Since they started their business incubator in 2014, the number of spinout companies has doubled.

• InnovUS helped SU spinouts to raise R200-m investment.
• In 2020, SU companies employed 300 people.
• SU Launchlab was twice awarded the top university-based incubator in Africa (2017-2018, 2019-2020).
• SU LaunchLab supported 200 companies since 2014.
• InnovUS Tech Transfer team has won various awards.
• In 2020, Time Magazine named a product developed with SU technology (from their Nanofiber company) as one of the best 100 innovations globally.
• SU satellite company controls over 100 satellites in orbit, exports to 25 countries and is a key supplier to NASA.

“We’d like to have more collaborations with other industry players, other universities, investors. We would also like to see entrepreneurship embedded in the curriculum.”

Delegate 1: “I’m in the incubation space at one of the TVET colleges. One of the challenges we experience is what to do with SMMEs who are not transitioning and progressing to success. It’s a three-year programme but some have extended it to 4/5 years.

Ms Singh: We have a unique structure: in order to de-risk the company, we first incubate it for a number of years within the university. That’s when we support with programmes like translational fellows, university technology and pre-seed funding. That helps us build that tech pipeline to bring you to a point where you can have a product that can be successful in the market. Only then do we decide that the company can spinout and become an SMME. For an early-stage company, if they’re not generating within three years, there’s a cost involved.

Delegate 2: We must distinguish between startups and SMMEs. An enterprise in the incubation phase is not an SMME.

Ms Singh agreed. “At Stellenbosch, once you spin out, you have two years in incubation, and then you have to be self-sustainable. Prolonging that spinout process helps more with the success rate. Early stage technology is really difficult to de-risk.

Delegate 3: Stellenbosch has a lot of companies. Which model is the University using to benefit from Intellectual Property? The equity or royalty model? Of course, the University needs to benefit; the money has to come back.

Ms Singh: “If it’s a Stellenbosch spinout company, we take equity in the company, but the technology that is developed within the university is licenced to the company.
But the model we use for that licencing is that with National Intellectual Property Management Office (NIPMO) approval, we give the company (say five years) a royalty-free licence. Thereafter, we charge minimal royalties because we have a shareholding in the companies. The reason we do it is that most of our academics stay within the university. They don’t spin out with the company and become a shareholder. That royalty income then gets distributed to the investors who are remaining. But the support that the university gives to the company is invaluable. Most startups don’t have that support: fundraising, getting all the CICP documents ready… We help until the company is sustainable and can carry these costs.

University students, staff and senior leaders came out in numbers to attend the EDHE Lekgotla 2022. Combined in-person and online attendees were counted at around 600.

Charmain Naidoo is a contract writer for Universities South Africa.