A tech-driven diversification strategy for growth, redefined leadership and opening new opportunities – this is how SA companies can create new revenue streams with corporate ventures

Looking to create new corporate revenue streams?

A diversification strategy is essential for medium-to-large companies aiming to sustain long-term growth and bolster existing income streams. It’s about creating innovative ways to deliver value, tap into new markets and expand offerings, all while leveraging the power of technology to make it happen.

Sometimes referred to as venture building in the corporate sector, finding innovative uses for new technology doesn’t just enhance operational efficiency – it opens doors to entirely new possibilities. For example, Netflix’s shift to a subscription-based model not only changed entertainment but also established a recurring revenue stream that continues to scale globally.

Here’s why every SA corporation needs a tech-enabled diversification strategy…

Why Diversification Strategies Hinge on Technology for Growth

Technology is a critical enabler for businesses looking to diversify. It provides tools to innovate, enter new markets, and transform traditional offerings into modern revenue generators.

Take Tesla as an example. By integrating software into its vehicles, Tesla shifted from being a car manufacturer (relying on a once-off purchase) to a provider of subscription services like self-driving capabilities. This diversification strategy ensures recurring revenue while deepening customer loyalty.

Even industries rooted in tradition can embrace this. For instance, John Deere’s integration of IoT sensors and machine learning into its tractors transformed it from a manufacturing giant into a data-driven technology partner for farmers. By diversifying its offerings, John Deere has locked in customers who now depend on its advanced tools for optimal farming.

Technology-driven diversification isn’t limited to industry leaders. Any company can unlock new revenue opportunities by partnering with tech innovators to design and implement a venture build – see how we’ve helped other companies create new revenue streams and capabilities with tech.

The Business Case for a Tech-Driven Diversification Strategy

A tech-enabled diversification strategy doesn’t just increase revenue streams; it also strengthens resilience and adaptability in a competitive market by allowing companies to:

• Expand market reach: Digital platforms help businesses access untapped customer bases. E-commerce, for example, allows manufacturers to bypass traditional supply chains and sell directly to consumers globally.

• Create new products or services: Technology enables companies to innovate beyond their core offerings. For instance, IoT devices and SaaS platforms add new layers of value, creating entirely new revenue streams.

• Build ecosystems: Integrating products and services into ecosystems keeps customers within your brand, enhancing loyalty and revenue.

• Monetise your data: Data has become one of the most valuable assets for businesses. Companies can monetise insights through premium analytics services or sell anonymised datasets.

A well-implemented diversification strategy positions companies to weather market changes, reduce risk and sustain long-term growth.

How Technology Can Enable a Diversification Strategy

By blending innovation with customer-centric solutions, corporates can build additional layers of value into their offerings:

1. Product-as-a-Service Models

Traditional products can evolve into ongoing services, offering new recurring revenue streams. This approach shifts the focus from one-time transactions to sustained customer engagement.

• Example: Smart home devices like Nest thermostats or Ring doorbells are no longer just hardware products. By integrating cloud services and app-based controls, companies offer software subscriptions for advanced features such as energy monitoring, security alerts, and AI-powered automation, similar to local venture Henlo Coffee Co.

• Why it works: This model ensures a steady revenue flow while also increasing the customer’s dependency on your ecosystem, making it harder for them to switch to competitors.

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2. Digital Marketplaces

Technology enables companies to act as intermediaries, connecting buyers and sellers through scalable platforms. These marketplaces generate revenue through transaction fees, subscriptions, or premium listings.

• Example: Airbnb started as a platform connecting homeowners with travellers, creating an entirely new market for short-term stays. Similarly, Etsy enabled independent artisans to sell their products globally.

• Potential for corporates: A logistics company could create a marketplace for freight matching, while a bank might build a platform for connecting small businesses with alternative financing providers.

• Why it works: These platforms benefit from network effects—the more participants on the platform, the more valuable it becomes for all users, which drives organic growth.

3. Data Monetisation

Data is one of the most valuable assets a company possesses. Technology can transform internal data into marketable insights, providing value to external stakeholders while creating new revenue streams.

• Example: Agricultural companies like FarmLogs or, locally, Picklogger, use crop yield data collected through IoT sensors to offer subscription-based insights to farmers, insurers, and supply chain operators. Logistics providers sell route optimisation data to e-commerce companies to reduce delivery times.

• For corporates: Retailers can monetise purchase behaviour data to assist brands in refining product strategies, while manufacturers can sell production line efficiency data to suppliers.

• Why it works: Data monetisation turns an underutilised asset into a recurring revenue generator, especially when paired with advanced analytics.

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4. Customer-Focused Ecosystems

Creating a seamless ecosystem of complementary products and services increases customer retention and lifetime value. This approach often involves using technology to integrate hardware, software, and services into a unified experience.

• Example: Apple’s ecosystem connects devices like the iPhone, iPad, and Apple Watch with software services such as iCloud, Apple Music, and the App Store. Customers are incentivised to remain loyal because switching ecosystems disrupts convenience.

• Corporate opportunities: A bank could integrate financial products like savings accounts, loans and investment portfolios into a single digital platform with AI-driven personal finance advice. Similarly, a healthcare company could connect wearable health devices with telemedicine services or advanced diagnostics tools like Biocode.

• Why it works: Ecosystems not only increase customer spend but also reduce churn, as customers derive value from interconnected services.

See our interpretation of the Musk guide to building better products.

5. Green Revenue Streams

The increasing focus on sustainability has created opportunities to diversify revenue through eco-friendly initiatives powered by technology.

• Example: IoT-enabled energy management systems like Enel X help businesses monitor and optimise energy usage in real-time, charging subscription fees for access to insights and recommendations. Carbon offset platforms like Pachama use AI to verify reforestation efforts, creating a new revenue model based on environmental stewardship.

• Corporate applications: A manufacturing company could monetise sustainability by offering clients insights into their carbon footprint, or by developing smart packaging solutions that reduce waste.

• Why it works: Green solutions align with corporate social responsibility goals while addressing a growing customer demand for sustainable practices. This creates a competitive edge while generating revenue.

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Real-World Examples of Tech-Driven Innovation in Various Sectors

• Agriculture: Picklogger uses GPS and accelerometers to log pruning activities and generate yield maps, enabling precision farming and improved orchard productivity.

• Healthcare: Biocode provides rapid and laboratory diagnostic tools for inflammation-related conditions, enhancing early detection and treatment efficiency.

• Sustainability: H2O Go deploys card-operated vending machines to provide 24/7 access to clean drinking water, encouraging eco-friendly bottle refills.

• Mental Health: Kaboose fosters connections for autistic and neurodivergent individuals through a platform for building friendships and social groups.

• Hospitality: Henlo Coffee Co. introduces smart espresso machines with automated maintenance and real-time insights, elevating customer service and operational efficiency.

• Property: LeaseSurance offers insurance-backed alternatives to rental deposits, combining advanced risk profiling, automated workflows, and real-time claims management to streamline landlord operations and improve tenant accessibility.

Your Growth Engine: A Diversification Strategy for the Future

Unlocking new revenue streams is not just about survival; it’s about thriving in a competitive landscape. A tech-enabled diversification strategy can empower companies to innovate, reach new markets, and build sustainable growth models.

Need help designing your corporate diversification strategy? Book a strategy session with the Octoco team.