‘Toxically Optimistic’ Smith Is Looking Ahead

The CEO is standing at reception when I arrive. I check my watch. “Sorry, I’m a bit late, traffic.” He welcomes me, shakes my hand and assures me it’s no problem.

Gary Lemke writes that the last time he saw Wӗhann Smith at his Kuda offices in Big Bay, Cape Town, was during Covid-19.

Then, there had been masks and sanitisers all round and not even a fist bump. Now, there was even the hint of a hug.

How times have changed!

Adding to the changes, Kuda, a specialist insurance and foreign exchanges services firm, with an industry-leading position in the horse insurance market, are evolving, and their revenues are nearly back to what they were pre- Covid.

The pandemic had a devastating effect on racing, with Phumelela Gaming going into business rescue in March 2020 and the industry all but disappearing off the edge of a cliff.

We go into a small meeting room where I immediately notice two framed paintings on the wall, by Cape Town artist Victoria Verbaan. I don’t say anything, but for me it’s a subtle reinforcement of how important the equine industry is to Kuda. Although that might be stating the obvious given the company logo is of a horse’s neck and head.

Smith himself is starting to emerge from deep waters, having given so much time – he puts it at “hundreds of hours” – with the Mary Oppenheimer and Daughters Restructuring Task Team of himself, Brian Riley, Charles Savage, Mike de Kock and David Abery.

He speaks fondly of the experience gained and friendships forged but admits the entire business rescue operation to have also been a draining process.

Now, the ship is in calmer waters and thanks to the tireless efforts of so many people, and the energy and cash injections from the likes of Mary Oppenheimer and Daughters, and more recently Hollywoodbets and Greg Bortz, racing has avoided being marooned on the rocks.

“However, I do feel that my contribution helped shape where we are today and helped the industry in very difficult times. I don’t think many people realize how close we came to the precipice. All I could offer was my time, while the Oppenheimers did a lot more, investing large, large sums of money, which Greg and Hollywoodbets have now done too. Once the Hollywoodbets and Greg deal was done there was no need for me to be on the Kenilworth Board – and that was only just over a year ago.”

“It’s incredible how much Greg and his team have achieved in such a short time. It’s beyond all wildest expectations. It was good and necessary for me to step away and focus on our business. It’s no secret that Kuda went through tough times too. The racing stock had a massive effect on the bloodstock insurance market and at the same time the game market was under huge pressure. But, our sport horse, personal, commercial and forex divisions kept the business afloat. Bloodstock traditionally was our biggest revenue driver, but still today it’s not back there. However, overall, in June 2023 Kuda was back up to pre-Covid levels in nominal terms.”

Ever the optimist – he says his wife calls him “toxically optimistic … I don’t know whether that’s a compliment or not!” – Smith is looking ahead, not behind.

“The next five years are going to see the South African racing industry in a very healthy space. Stud farms are achieving better sales results, which means breeding numbers will improve. The next yearling Sales will be strong. At the last two-year-old sale it didn’t feel like a two-year-old sale.”

“At the top end the right horse is getting the right money and that’s all breeders can ask for. That stimulates the whole insurance cycle. I’m super excited where the bloodstock industry is going. There has been a degree of autocratic leadership to set it on the right path.”

Back at Kuda, the company has grown to the degree that Smith is no longer one and all. An eventful 14 years have elapsed since Kuda was formed in 2009 by Smith.

“Dawn (Newman) and Josi (Marais) were employees No2 and No3.” There are now some 40 staff employed by Kuda.

“I suppose it could be argued that five years ago I was seen, rightly or wrongly, as the face of the business. We have evolved, and Janine Kóster is now running niche market insurance, and she will be much more visible in industries in which she operates, which includes racing.”

“A lot of the investment we made, which included a review of our insurance vehicle and an extensive systems and technology journey, is concluding. We are starting to reap the benefits, which allows me to get back to networking, participating and being active in racing again. The hard work of my colleagues will allow me to do more of what I really enjoy.”

To that effect one can expect to see Kuda get more involved in racing.

“We were always active in sponsorship in the racing industry. I suppose this reduced during Covid times, purely because of the financial downturn. But our intention is to continue actively participating in the racing industry, which includes sponsorship. We have taken a private suite at Kenilworth again, and we can’t wait to see what Cape Racing unveils over the summer season. I have always participated behind the scenes and I love connecting our industries. I used to enjoy introducing people to the sport.”

Perhaps the most famous example  was Smith’s introduction of game farmer Piet du Toit, who paid R5.2-million for Horizon, a son of Dynasty, in 2014. “He also bought and raced Live Life,” he enthusiastically adds.

Given the ups and downs and treading of water over recent years, it’s good to know that racing, and Kuda, is riding the crest of the wave again. His luck, as an owner, is also starting to change for the better.

“I have shares in Captain Arrow, which runs at Durbanville tomorrow,” he tells me. “The stable reckons nothing can work with it at home, but he doesn’t bring that work to the races.”

The next day Captain Arrow, a winner of only one of his previous eight starts, started at odds of 8/1 and came through to win well. A further example that whatever Smith is touching right now is turning to gold.