Meet Sean and Donovan Bergsma, the new owners of Gumtree SA

Sean and Donovan Bergsma, the new owners of Gumtree SA, the country’s biggest online classified advertisement website, launched their first tech start-up as twenty-somethings from a bedroom in their parents’ home.

The brothers own Durban-based venture capital firm Impresa Capital.   Through this they hold a majority of the shares in the Ignition Group of companies, also based in the city, and bought Gumtree SA. The sum they paid for it has not been disclosed.

The Gumtree site began as a collaboration  for SA, Australian and New Zealand expats seeking accommodation to rent in London. It was owned by US multinational eBay before it was sold to Norwegian firm Adevinta. Even before the Ignition Group’s purchase, it was in the marketing space, employing 3,500 people in its 24-hour call centre in Umhlanga with customers in the US (about 50%), the UK and SA. Among its products are contracts for cellphones, satellite TV, vehicle tracking and insurance. The Ignition Group previously bought Virgin Money SA, and now operates a neobanking business, Spot Money.

The brothers are shareholders in Fundamentum Property Group, a local firm that is developing a new green city in Shongweni, west of Durban, and which built the KwaMnyandu shopping centre in Umlazi and Midway Crossing in Joburg. They also own Nambiti, a big-five game reserve northeast of Ladysmith in KwaZulu-Natal.

Sean, 42, and Donovan, 38, speak of a “humble home” in their teenage years as pupils of Hillcrest High. They hustled, selling sweets, and by catching, packing and selling sardines to local supermarkets during the province’s famous sardine runs. They used the profits to pay for school trips and tennis tournaments.

The brothers founded the Ignition Group in 2002, after starting a small business that operated 3,000 Adondo community payphones on the Vodacom network and was contracted to informal traders. When Cell C entered that space, they began selling and delivering Vodacom cellphone contracts directly to consumers.

“We started out of my bedroom,” says Sean, but later their father converted part of the house into an office. By 2003 they had rented an office in Hillcrest and hired from five to 10 people. Soon afterwards, with a staff of between 1,200 and 1,500, they took up two floors in Hillcrest’s BP Centre.

The brothers always had an interest in technology and both obtained a BCom in informatics from Unisa. “Our dad came out of a tech background,” says Sean. “He was in industrial technology and we were lucky to have computers in the house in the early days. I couldn’t see myself doing anything in the BCom landscape, so I chose something that was tech driven.” It was also the time of the dot-com and e-commerce boom.

Sean says an entrepreneurial uncle who worked in telecommunications, as well as his idol at the time, Richard Branson, inspired him. A senior manager at Ignition similarly inspired the brothers and sparked their desire to buy Gumtree SA.

“Earlier this year we had our company conference, at which we went through our planning for the year ahead. One of our senior managers said: ‘Understanding all we know, why don’t we buy Gumtree?’” says Sean. Another manager picked up that Gumtree had been sold to Adevinta. He contacted Adevinta and introduced the brothers to the Norwegians.

Sean says the plan is to transform Gumtree SA from a classified space into a marketplace that addresses consumer concerns of safety and quality. This includes incorporating online payment, delivery and six months’ insurance, so that consumers can pay for goods online and get them picked up and delivered without the risks involved in meeting a stranger. Customers will also be able to phone the firm’s call centre for advice.

“It is part of growing the organisation and bringing the perspectives of telesales and e-marketing together. Though people can buy online, they want to be sure they are making the right decision, and may need to validate it by talking to someone at a call centre,” says Sean.

“Gumtree is a very important asset for us, for Africa. The validity of the Gumtree brand is well understood in Africa and it is the perfect market for us to expand into. Our brand licensing arrangements include the whole of Africa, and the intention is to grow further into the continent. When we have completed the implementation of our technology, the next point of contact will be the  Southern African Development Community and then East Africa,” says Sean.