Kalon Venture Partners, a venture capital firm hailing from South Africa and specializing in digital innovations, has announced plans to launch a fund worth $50 million. This move marks the first time the company will invest beyond the borders of South Africa.
Having closed its latest funding round in 2021, Kalon Venture Partners had amassed ZAR250 million (equivalent to US$17.5 million at the time). Initially, the company was established as a Section 12J enterprise, a scheme that encouraged South African taxpayers to invest in domestic companies while providing a tax deduction of up to 100 per cent.
However, with the discontinuation of the program in 2021, Kalon will pursue alternative financing options for its latest US$50 million fund, which will focus on the African market. The firm will now turn to institutional investors to fuel its expansion beyond South Africa’s borders.
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“That will be our foray into African venture capital,” Clive Butkow, the CEO of Kalon Venture Partners, said.
Venturing beyond South Africa and expanding operations across Africa would not only bring opportunities but also pose challenges for Kalon. Butkow acknowledged his full awareness of this fact.
“You can’t just lift and drop something into a new country like Nigeria, Kenya or Ghana. You look at our retailers, telcos, banks, they are dismal failures in those markets. You have to go and re-find product-market fit. There are differences — culture differences, there are differences to the way people buy, there are differences to the ideal customer profile,” he said.
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“We are not naive, we don’t believe for one second we’re just doing to drop our company into a new market and it is going to work. We are definitely looking at hiring people in those markets, so we’ve got feet on the streets and boots on the ground. We don’t believe for one second South Africans can go and run a Nigerian business or a Kenyan business. We’ve just seen too much failure when you try to make that happen.”
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