Knife Capital’s new $50 million African Series B expansion fund, known as Knife Fund III, has received backing from a variety of investors, including Standard Bank and the South African Small and Medium Enterprise Fund (SA SME Fund).
The purpose of the fund is to invest in the expansion of African firms that are driven by innovation and to address a key financial gap for follow-on operations.
With this pledge, Standard Bank joins other regional and global investors as one of the Fund’s most important investors.
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“Standard Bank believes in the positive impact that investment into early-stage high-growth businesses can have on innovation, job creation and economic development of South Africa. We have partnered with a number of the leading investors in this space and are excited to add Knife Capital to our venture capital portfolio. With Standard Bank’s expansive African footprint, our suite of bespoke banking products and extensive client base, we can facilitate the growth journey of businesses that scale internationally,” Akash Maharaj, executive: equity finance and investments at Standard Bank Corporate and Investment Banking, said.
Southern Africa’s high-impact entrepreneurship is hampered by the dearth of local institutional investors for venture capital. Standard Bank is thus setting the path for banking institutions to approach growth equity funds.
Standard Bank has invested in Hlayisani Capital and is finalising investments in additional Funds that use technology and creativity to create a better, more sustainable future for everybody.
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Knife Capital is also completing the due diligence and legal procedures of a few remaining donors to round off the $50 million target raise. IFC, Mineworkers Investment Company, SA SME Fund, foreign development funders, and famous family offices are also committed.
The SA SME Fund has had a significant influence on South African early-stage investing by funding KNF Ventures and Grindstone Ventures.
Ketso Gordhan, CEO of the SA SME Fund, remarked, “We nurture South Africa’s vast entrepreneurial spirit through long-term partnerships”
Knife Fund III builds on Knife Capital’s prior funds and supports its value chain investing methodology. Focus on scalable B2B IT firms with exit options.
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The fund can directly invest in South African breakout firms and co-invest with other reliable investors in enterprises throughout Africa. It led a $10 million round in DataProphet, a manufacturing AI-as-a-service provider.
“We are very excited to gain a not only a funder, but also a growth partner for our portfolio companies in Standard Bank,” said Keet van Zyl, co-founder at Knife Capital. “With their infrastructure throughout the continent they are already proving themselves to be a value-adding banking partner that have the funds and experience to responsibly deploy capital as well as the vison to influence positive change in African emerging markets.”
The significant lack of follow-on funding that has characterised the venture capital asset class in Southern Africa and prevented enterprises from attaining their full potential or departing at the optimal time is something that Knife Fund III seeks to remedy. The fund is structured as a limited partnership in Jersey (with assets denominated in US dollars) and a limited partnership in South Africa (with assets denominated in South African rand), both of which will co-invest with one another in portfolio firms.
Standard Bank African tech Standard Bank African tech
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexpert