Investor Alan Knott-Craig Jnr has stepped down as CEO of Africa’s largest mobile social network, Mxit. The company, which has just received a R100 million investment by shareholders, announced the move today.
Mxit, which was acquired by Knott-Craig Jnr late last year, is available in 128 countries. It is represented in international markets that include Malaysia, Kenya, India, Indonesia, the United Kingdom, United States, Nigeria, Brazil, France, Germany, Italy, Portugal and Spain, where users have access to Mxit’s chat function.
“While the shareholders and I share the same vision, we differ on how to get there. Therefore, I agreed to go my own way. I wish them all the best for the future. Mxit is Africa’s biggest tech success story, and can be a global success story,” said Knott-Craig Jnr.
The company’s current CFO, Francois Swart, will act as the interim CEO. Mxit will be recruiting a new CEO and other new executives to drive the expansion.
In a statement, the company says its strong image is partly credited to Knott-Craig, saying that it is South Africa’s biggest success story which is “in no small part due to Knott-Craig’s involvement and vision over the past year”.
“Mxit has a window of opportunity and is pursuing aggressive growth by increasing the user base in Africa through partners in targeted African countries,” it adds.
Knott-Craig will also be stepping down as the head of Stellenbosch-based Venture Capital company, World of Avatar, the relatively new investment firm that invested in a fair amount of internet startups last year.
Commenting on the move, Steven Ambrose, the head of tech research company Strategy Worx, says that the decision could be a result of both sides no longer agreeing “on the future strategy of the company”. This, he says, could have “created a situation where it was AKC’s [Alan Knott-Craig's] way, or the highway, and those that hold the purse strings called the shots”.
He also notes that the recent investment of R100-million “changes the nature and style of the company and will result in a completely different operation going forward”.
“The demands of big business and big finance often necessitate a very different and far more structured approach to that of a nimble venture capital style operation which AKC appears to truly enjoy. This more than anything could have resulted in his resignation from WOA,” adds Ambrose.
In a previous interview with Memeburn, the former CEO said that he purchased Mxit because he wanted to tell its story, which he reckoned is “a success story of likes of Facebook in its own context”.
According to Knott-Craig, at the time Twitter was doing eight-billion messages a month, while Mxit was doing 22-billion a month. He said that the average Facebook user spent 15 hours a month on Facebook, while an average Mxit user spends 45 hours month on MXit, “people don’t know this. It is a massively engaged, massively active audience”.
Technologist Arthur Goldstuck says the move comes as a “shock” as Knott-Craig was “invested on a personal level in the future of Mxit and social networking in Africa”. The head of research company World Wide Worx reckons that the former CEO may have been “too relaxed about Mxit’s business model” saying that perhaps he banked heavily “on the rising trajectory of Mxit Moola to look after business while he — in his own words — was having fun”.
The company may also be facing pressure from shareholders as it is seeing very little growth. Goldstuck comments that although Mxit is South Africa’s biggest social network “it’s seeing no growth while the competitors are mushrooming in numbers (of networks) and size”.
“It is likely that they were not overcoming that apparent stagnation, but if that is the reason, it would be surprising, as merely holding on to 9.3-million highly active users is an achievement. The bottom line in such matters is usually just that: the bottom line, i.e. how much money are they making? If investors didn’t like Alan’s answer, they may have decided to find someone who could give a better answer. The “investment” sounds more like a buy-out.”
Mxit has been working hard to create a platform that developers can build products on. In the last few months the mobile social network has launched a set of new developer APIs as well as a redesigned developer centre.
The company recently acquired social network site builder Motribe, a move Knott-Craig felt was long overdue and a “marriage made in heaven”.
Mxit was founded in 2005 by Herman Heunis who stepped down when Knott-Craig acquired 90% of the company late last year.