Digital Africa Ventures, a local venture capital (VC) firm focused on tech start-ups, has secured R25 million ($1.7m) to invest in innovative South African firms. DAV was founded in 2020 by Thandeka Xaba and her business partner Nonkululeko Komanyane, and claims to be one of the few black female-led VC funds in South Africa, with founding principals under the age of 35.
By bridging the finance and support gap for early-stage tech entrepreneurs, the Johannesburg-based fund invests in early-stage South African software businesses, focusing on the underserved small company sector. The SA SME Fund anchors the DAV Fund, which is also backed by E-Squared Investments and PAPE Fund Managers, both of which invested in the current R25 million investment round.
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Since launching the VC firm, the two women claim to have collected R26.5 million in seed capital for early-stage digital tech start-ups, and they hope to help even more entrepreneurs with the new funding round.
“Digital Africa Ventures’ investment thesis is focused on writing cheque sizes for start-ups of between R2 million to R5 million, which is difficult to raise in SA since there is generally a concentration of funding appetite in the brackets below R2 million and above R7.5 million.
“We do not only deploy capital but also assist investee companies with their strategy and in reaching key milestones. Our approach also assists with strategic support in operations, sales, marketing and business development,” explains Komanyane.
Since its founding, DAV has worked with over 60 start-ups, assisting several entrepreneurs with strategy, cap tables, user journeys, employee stock ownership plans, and general input on their business models.
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“We like to help as much as we can regardless of whether we will be investing in a business or not. We believe acts like these benefit the ecosystem as a whole and are needed to help South Africa’s venture capital ecosystem advance and compete globally,” Komanyane points out.
On March 31, 2021, DAF announced its first investment in Tripplo Software, a digital logistics technology that enables the safe and efficient transportation of road freight cargo across SADC.
Tripplo has over 400 transporters on its platform in its second year of operation, and has allowed freight transportation within South Africa as well as across borders between Angola, Botswana, and the Democratic Republic of the Congo, among other African countries.
“Since 60% of South Africa’s tech entrepreneurs are black, the need for support at the early stages of their businesses will ultimately drive the technological advancement, job creation and economic growth desperately needed in South Africa and elsewhere in Africa,” adds Xaba.
“The recently raised funds will be invested into early-stage digital technology start-ups. There is a lack of capital in the seed investment stage other than from friends and family. In addition, entrepreneurs who have innovative ideas and the requisite skills to build a business are left unsupported at times, as they do not have access to generational knowledge and wealth.”
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write