START-UP CYLINDER MANUFACTURER SECURES R300 MILLION FUNDING FROM THE U.S.

Black-owned Johannesburg-based start-up, Bluedrop, has proved that there is still opportunity for bankable businesses to attract funding in an environment in which COVID-19 has made lending institutions to be averse to taking the risk of investing in new ventures.

Bluedrop has got a R300 million investment boost from J.Sassoon Group, a private-equity fund based in Washington DC, for its Liquefied Petroleum Gas (LPG) cylinder manufacturing plant, which is located in the West of Johannesburg.

Bluedrop’s Chief Financial Officer, Kennethi Maduna, said his organisation was excited about development as it underlined the potential that local businesses, not least black-owned, have. “As an independent 100% black owned company, we are ecstatic with the investment made by J. Sassoon Group more so for showing their confidence in us and South Africa as an investment destination.”

Bruce Fein, J. Sasson Group’s CEO, revealed that what made the deal even more ground-breaking was that Bluedrop is the first ever pre-revenue start up in Africa that J. Sasson Group has invested in. “Bluedrop is the type of forward-facing, energetic company we are looking for. We are confident that this is a value accretive investment.”

Usually, financiers are not keen to take a gamble on start-ups in a pre-revenue stage, more especially in a field as incredibly competitive and highly regulated as cylinder manufacturing. According to terms of the transaction, Bluedrop has access reduced borrowing costs in addition to a 12-month payment holiday. Hopefully, this is an arrangement which will enable Bluedrop to build its businesses.

The project is expected to create 110 direct jobs during construction and 35 direct jobs at full commercial operation.

J. Sasson Group focuses on start-ups, entrepreneurs and midmarket companies.

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