Secha Capital, the brainchild of visionary founders Nombuso Nkambule, Brendan Mullen, and Rushil Vallabh, marked a significant milestone today with the announcement of the first close of its second fund. A total of ZAR 300 million (USD 15.6 million) in investments have poured in from illustrious blue-chip investors, solidifying Secha Capital’s position as a game-changer in the Southern African venture capital landscape. The esteemed investors behind this financial leap include RMB Ventures, 27four Investment Managers, The SA SME Fund, and Caleo Capital.
This latest funding round, with a target of ZAR 650 million (USD 33.8 million), sets the stage for Secha Capital to implement its distinctive Operator-Investor model. Designed to bridge the gap between early-stage startups and mature companies, Secha Capital identifies traditional businesses in Southern Africa that are undergoing a tech-enabled transformation into the green economy. Rushil Vallabh, one of Secha’s founders, emphasized their mission: “We invest in companies at an inflection point in their growth trajectory. Most capital in Southern Africa is invested in either extremes — early-stage start-ups or mature companies. We’ve identified a gap in the market where we can find a unique proprietary pipeline and bring in our team of Operator-Investors to achieve outsized returns.”
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Secha’s Operator-Investor model involves deploying highly skilled human capital resources into portfolio companies to work on high-impact value creation projects, propelling exponential growth for the entrepreneurs at the helm. Brendan Mullen, another driving force behind Secha Capital, added, “We are a young and diverse team. We bring operating expertise to ‘heartbeat-of-the-economy’ growth stage companies via our strategy consulting, finance, and entrepreneurial backgrounds.”
Secha Capital’s first fund showcased that combining equity investments with human capital for growth stage businesses is a replicable model for generating financial returns and social impact, with a particular focus on women-founded businesses in South Africa. Fund II is already underway with four investments in innovative companies: iG3N, Cultura Fresh, Herbivore, and FarmTrace.
Brian Waweru of RMB Ventures expressed his admiration for Secha’s thesis-driven investment strategy, highlighting its potential to stimulate economic growth in South Africa and benefit the broader private equity and venture capital ecosystem. He stated, “Our investment in Secha is consistent with our strategy to explore alternative models to stimulate economic growth in South Africa. We are proud to support Secha’s ongoing success.”
As a subsidiary of FirstRand Limited, the largest financial services group in Africa by market capitalization, RMB Ventures has a formidable track record in providing private equity capital, with investments spanning over 40 transactions since the mid-1990s, and a current portfolio valued at over ZAR 8 billion (USD 417.6 million). The fund is poised to make ten more investments within the next five years.
Ridwaan Kajee of 27four Investment Managers echoed the sentiment of confidence in Secha Capital, emphasizing the uniqueness of their Operator-Investor value-add model. “Secha has demonstrated that the model works and is replicable, and we’re proud to therefore back this team to scale the model and showcase a new approach to investing in Africa,” he said. 27four Investment Managers, a diversified global financial services group, is known for innovative investment strategies and support for independent asset managers.
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Secha Capital Fund II anticipates its final close in September 2024, with a mission to continue fostering job creation, transformation, growth, and exits. Claudia Manning of The SA SME Fund shared their motivation for investing in Secha, stating, “We were impressed by Secha’s track record of job creation, transformation, growth, and exits. We invested in them so that they can continue what they do with more companies, more people, and at a greater scale.”
The SA SME Fund, with its newly established Venture Capital Fund of Funds (VCFoF), focuses on later-stage VC funds in South Africa, aiming to achieve superior risk-adjusted returns while championing transformation and impact in the entrepreneurial landscape. Secha Capital’s journey is poised to make a lasting imprint on Southern African business development, thanks to its innovative Operator-Investor model and the strong support of its visionary investors.
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