Local tech solution for cars of all seasons

If you've been driving on the left-hand side of the road for most of your life, driving on the right can be a daunting experience. (Photo: iStock)
If you've been driving on the left-hand side of the road for most of your life, driving on the right can be a daunting experience. (Photo: iStock)

Rivo Mhlari had always dreamt of having his own business. He therefore frequently attended business seminars and surrounded himself with business leaders to identify gaps in the market. In 2013, during a seminar focusing on businesses using artificial intelligence, he realised that machine learning was the next “big thing” and started looking for a way to cash in on this trend. 

His market research revealed that most top-end vehicles were already furnished with the latest technology, so he decided to focus on creating a “mass solution” for less sophisticated vehicles. The technology has therefore been built to operate on any vehicle made from 1996.

Mhlari, who was studying accounting at the University of Cape Town at the time, bounced the idea off his friends, after which Jesse Matheri, who studied geomatics, regularly enquired about his progress with the commercialisation of the idea.

Mhlari, as a result, asked Matheri to join him in starting Rikatec, which uses a combination of global positioning, machine learning and artificial intelligence to rate driving habits, predict possible breakdowns and monitor wear and tear.

“Many books have been written about how you should choose a business partner, but I went with the one who showed interest in what I was doing,” says Mhlari, who last year featured on the Forbes Africa 30 Under 30s category for technology.

“Matheri and I fill one another’s weaknesses. I am the extrovert with lots of ideas, while he is the highly strategic introvert who has helped to turn my ideas into a lucrative business,” explains Mhlari.     

The two founded Rikatec in 2013 and worked on the prototype while finishing their studies. While they received R25 000 in start-up funding from the Western Cape department of economic development in 2015, their biggest break came when one of Mhlari’s mentors, Rod Hemphill, invited him to an Easter dinner in 2016.

“I was the youngest of 15 guests – all business leaders in their own right. They took a keen interest in my idea, with Philip Gray offering to invest R30 000 in the company, interest free, when it emerged that this was all it would take to do a novelty search and file a provisional patent,” Mhlari says.

This article originally appeared in the 18 April edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

Gray thereafter invested R500 000 into the commercialisation of the prototype, which opened the door for other major investments. “What motivated me most was that Philip invested in the business, because he believed in me. It was not just because I had a great business proposition,” Mhlari says.

The product

Rikatec uses real-time data and machine learning to provide tailor-made solutions. The initial idea was to help fleet managers improve vehicle maintenance by using big data to monitor driving habits and send real-time alerts on when vehicles should be serviced or are about to break down.

Algorithms have since been adapted to also meet the needs of vehicle financiers, insurers and rental companies. “Our system allows companies to adjust pricing models according to driving habits and the real-time condition of a vehicle. This motivates better driving habits and looking after of cars, resulting in improved safety, lower fuel consumption and vehicle wear and tear. Data can also be used to determine a guaranteed residual value of a vehicle,” Mhlari says. 

Customers pay a monthly subscription fee and either buy the data-capturing units or pay it off like a loan. Alternatively, a once-off payment may be settled on for an agreed period. Each unit on average collects 80 000 data points per month.

Breaking into the market was easier said than done. “South African companies proved much more afraid of new technologies than I anticipated. And when they did, they favoured Western solutions over locally developed ones. We had to invest a lot of time and money in consumer education,” he says.

The 24-year olds’ age was another obstacle: “I had to persuade people almost twice my age, and with much more experience, that I could offer them a product that would add value to their companies. In the end, the best way of winning clients was to allow them to test the technology so that they could see the cost-saving benefits for themselves.” 

Mhlari feels that SA is in need of a new younger generation of dynamic business people to breathe new life into the economy: “We need people who are not afraid of taking calculated risks in this technologically driven world. People like Mark Zuckerberg who was still in his early 20s when he started Facebook.”

The company’s staff component has grown to 12 permanent employees, with over 35 indirect employees working on the manufacturing and development side – all done in SA.

Plans for the future

Rikatec’s patent has been registered in SA and in 147 other countries. Mhlari plans to service other African countries that have a need for a proactive big data and vehicle management system such as Kenya and Nigeria.

His goal is to have a purely African-bred product service to showcase African creativity and not just African consumption of Western products and services.

For now, however, his main aim is to realign the company to better suit the needs of the financing and insurance industries, which present bigger market opportunities than the fleet management industry.

This article originally appeared in the 18 April edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

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