South Africa has new tech dollar billionaire

Karooooo chief executive Zak Calisto has officially become a dollar billionaire, with his holdings in the company he founded now worth $1.1 billion.

Calisto holds 65% of the Karooooo group’s shares, with another 10% shareholding through a standing agreement with the company, giving him beneficial voting rights.

Karooooo’s share price has more than doubled in the past year, catapulting Calisto’s fortune.

Last Friday (16 May), the share price surged beyond its previous high of R925, ending the day at R970, and sent Karoo’s market capitalisation to R30 billion, or $1.68 billion.

This Friday (23 May), the company’s share price ended the week slightly higher at R980 per share, keeping Calisto’s direct stake at over $1 billion and making him the eighth member of the billionaire club in South Africa.

Karooooo, formerly known as Cartrack, is a global provider of fleet management, stolen vehicle recovery and insurance telematics services.

Calisto says that when he founded the company in 2001, he had about R100 in his pocket.

Initially launched as a joint venture with Netstar, Calisto explained that they financed the business through lucrative cellular contract reseller deals.

“In the early days, we had a very good agreement with Vodacom,” said in an interview with CNBC Africa.

“In those days, both Vodacom and MTN would give you cash incentive bonuses for taking out a 24-month contract, and that money helped us fund the business.”

Born in Portugal, Calisto moved to Mozambique when he was two years old. Soon after that, they relocated to South Africa.

Calisto began studying actuarial science at the University of Witwatersrand but dropped out because he found the subject matter “quite boring.”

After his compulsory military service, he completed an accelerated training programme at Standard Bank between 1986 and 1991 before deciding to go into business.

“I initially started as a distributor — working for myself — and doing a lot of the distribution for Netstar,” Calisto told BizNews.

“This is even before Altron bought Netstar.”

From dropout, to entrepreneur, to billionaire

Calisto established his reputation in the industry in 1999 when he helped Netstar expand into South Africa’s neighbouring countries.

This led to the launch of Cartrack with Netstar two years later. However, he said it didn’t quite work out as either company had envisaged, and in 2004, Cartrack went on its own. Ten years later, it listed on the JSE.

Initially launched as a stolen vehicle recovery company in South Africa, Cartrack has grown into a multinational powerhouse with operations in 23 countries.

It also expanded from recovery to offering tracking, data analytics, and business intelligence.

In 2021, Cartrack delisted from the JSE to relaunch on the Nasdaq under a holding company, Karooooo.

When asked where the name came from, Calisto told BizNews, “First of all, I am South African, and I love the Karoo.”

Calisto explained that when he externalised his shares around 2019, he formed a company in Singapore called Karoo to hold them.

Later, when they needed a legal entity to list on the Nasdaq, they tried to buy the karoo.com domain.

However, Calisto told Daily Investor’s Smart Money with Alisha Seckham that the American who owned it wanted a few million dollars for it.

“Then I just registered ‘Karoo’ with three o’s up to ten o’s — so now we own all those domains,” he said.

“Over time, we also learned it’s just a name — you can call it whatever you want.”

South Africa still accounts for about three-quarters of Karooooo’s 2.3-million strong customer base.

However,  the company has moved its headquarters to Singapore in 2020 and sees Asia as key to its expansion plans in coming years.

“There’s significant potential for even faster growth,” said Calisto.

The table below summarises the estimated wealth of South Africa’s eight dollar billionaires.