The SA SME Fund, the Department of Science and Innovation (DSI), along with its entity, the Technology Innovation Agency (TIA), and impact investor E Squared Investments have launched a ZAR300 million (US$17.3 million) “Seed Fund of Funds” aimed at providing critical early-stage capital to South African tech startups.
Disrupt Africa reported recently on predictions that the amount of venture capital available within the South African tech ecosystem is set to increase in the coming years as innovative de-risking models, like funds of funds, attract more institutional investment into the space.
That has already come to pass, as this new ZAR300 million “Seed Fund of Funds” launches with the goal of investing in at least 50 technology-driven startups through experienced fund managers, with a focus on innovation and transformation in South Africa.
“Seed capital is the lifeblood of innovation and entrepreneurial growth. Without it, many great ideas would never see the light of day. By injecting capital at this critical early stage, we are not just funding startups – we are cultivating the next generation of industry leaders,” said Ketso Gordhan, CEO of the SA SME Fund.
“South Africa has no shortage of brilliant minds, and this fund will ensure that more of them have the resources they need to succeed. Our goal is to make sure these companies have a fair chance at success and scale in the local and global markets.”
The fund addresses a key gap in South Africa’s venture capital ecosystem, where later-stage investments, such as Series A and Series B, have historically attracted more funding.
“The partnership with SA SME Fund aims to bolster funds towards start-ups and SMMEs through a fund of funds approach,” said Patrick Krappie, acting CEO of TIA.
“We understand that early-stage ventures, especially those grounded in technology, need a supportive environment to thrive. The Seed Fund of Funds will catalyse a wave of new startups by enabling them to transition from ideas to viable enterprises. This presents an opportunity for the fund to play a catalytic role in developing the country’s seed stage funding ecosystem, building the foundations that will deepen investment into the innovation economy and placing the venture capital industry on sustainable footing for the future.”
