South Africa’s tech billionaire behind the Nasdaq listed Karooooo

Zak Calisto is one of South Africa’s most successful entrepreneurs. He founded Cartrack in 2004 which has grown to an international powerhouse with thousands of employees.

Started as a stolen vehicle recovery service in South Africa, Cartrack is now a multi-national company which offers fleet management, stolen vehicle recovery, and insurance telematics.

The success of Cartrack’s products were shown in its latest results. The company experienced strong growth and recorded two of its best months of new subscriber additions during the lockdown.

The company now provides real-time data analytics solutions for smart transportation to over 1.3 million connected vehicles through its software-as-a-service platform.

Cartrack had a tremendous run on the JSE. It listed at R8.50 per share in December 2014 and six years later the company was trading at over R40 per share.

Calisto recently delisted Cartrack from the JSE and listed Karooooo, which now wholly owns Cartrack, on the Nasdaq stock exchange in the United States on 1 April 2021.

Three weeks later, on 21 April 2021, Karooooo made its debut on the JSE as a secondary listing.

Commenting on the deal, Karooooo CEO Calisto said it was done to open up the company to larger pools of capital which are available through the Nasdaq.

Nearly all Cartrack shareholders remained invested in Karooooo which illustrates the trust in Calisto and his future plans.

Cartrack

Calisto recently spoke to Biznews’ Alec Hogg and shared insights into how he build and scaled his business and what makes him tick.

He also gives details on how he plans to ensure the company’s continued growth.

See the full interview here: Zak Calisto, humble SA billionaire tech entrepreneur many have never heard of

Zak Calisto on the Nasdaq listing and business growth

I think we’re very content with listing on the Nasdaq. We were able to raise R500m, which is sufficient funding for us in terms of our growth and our R&D spend – the amount of capital we want to allocate now to accelerated growth.

We were growing in the region of about 22% pre-Covid. In Covid, we grew at 16%. I certainly believe we can accelerate our growth. If we look at the last six months of this financial year, we actually grew already at 23% year-on-year – which is stronger growth than we had pre-Covid.

I think it’s important that we now can tap into the capital markets that understand our story.We believe we will get a fair valuation and for which is, in my opinion, very important for all the shareholders.

On the strategy around Covid-19

We’ve invested over the years in a lot of technology – not only customer facing technology – but also with the way we operate the business internally.

Clearly, that allowed us to come out of the curve a bit quicker than our peers. Because we are able to work remotely with proprietary software – and we are able to monitor the performance of all our staff – we are able to service our customers and their conditions.

I certainly believe we’ve adapted and we will now continue to try to accelerate our growth and to deliver a good performance to our shareholders and our customers.

On his business journey

I went to Wits and studied actuarial science and I’m a dropout. I wanted to drop out. I found it quite boring. We had a very small class of actuarial science. At that point in time, I really found that I wasn’t a fit with my other colleagues and the professors.

I decided to do my military service, and once I came out of the military service, I did the accelerated training programme with Standard Bank. Then, I decided to go into business. Some of these things, it’s not that one plans it – it’s just the way it is. I just thought I wasn’t cut out to be an actuary.

I initially started as a distributor (working for myself) and doing a lot of the distribution for one of peers, which is Netstar. I assisted Netstar in going over the borders.

I come with a track record in the industry since 1994. This is even before Altron bought Netstar. I then innovated technology, which is Cartrack technology, and brought it to the market in 2004. Since then we’ve had a tremendous amount of innovation.

We’ve grown our management team. We now have over 3000 staff members. We’ve evolved as a business.

What we did in 2004 is very different to what we’re doing today – and we’ll continue to grow our business. Fundamentally, I believe we’re just a start-up. I get up in the morning believing there’s so much to be done and so little that we’ve accomplished.

On tackling the approach of scaling up globally

We’ve been very successful outside of South Africa in the neighbouring countries. I went with some of my senior staff onto the ground and built teams. I went to Europe and I was spending a good nine months of the 12 months over there, building the business.

I’ve now come to live in Asia as my permanent residence since 2014. I don’t think you can build the business if you haven’t got key people outside. You can’t use South Africa as the ivory tower to grow business internationally. I think it’s with huge difficulty – well, I certainly don’t believe we could do it.

The way we’ve done it is actually hands-on, travel and getting to know our teams on the ground. Making sure we employ local talent, people that understand the culture. We also very much localise our platforms and technology – as well as our business.

We are very much a centralised control system. We are quite fortunate to be a technology company, as have our checks and balances and our controls in place remotely.

On the name ‘Karooooo’

First of all, I am South African and I love the Karoo. When I externalised my shares approximately two years ago, I formed a company in Singapore, called Karoo, to hold my shares.

When I was there looking at all this corporate action that we did – and after that we applied with all the relevant authorities – the only way we could have done this transaction is through meeting and buying back of the minority shareholders.

At that point in time, it was very important to get karoo.com. The owner of karoo.com just wouldn’t give it to me at a reasonable price – he was asking for a million dollars.

At that point in time we said, “Okay, does it really make a difference whether it’s got Karoo with three, four or five zeros? It’s just a name.”

We didn’t want to do a name change, so we went for Karooooo with five zeros – and registered ‘Karoo’ – with three zeros to nine zeros – ‘dot com’.

All those domains belong to us, which allows people to get our name wrong and still land up at the right website.

Now read: The South African tech company whose share price doubled since the lockdown started

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South Africa’s tech billionaire behind the Nasdaq listed Karooooo