The SA SME Fund, an organization committed to fostering the growth of entrepreneurship and startups in South Africa, has recently achieved a significant milestone in the South African startup ecosystem. With great excitement, they have announced the successful completion of the first close of their R1 billion Venture Capital Fund of Funds (VC FoF).
Being the largest institutional investor in venture capital funds in South Africa, the SA SME Fund has established itself as a prominent player in driving innovation and supporting the entrepreneurial spirit in the country. Their relentless efforts to secure investments have yielded remarkable results, surpassing their initial funding goal of R500 million by securing a total of R600 million in commitments from visionary investors.
The first commitments to venture capital funds are expected to be finalized in June 2023, marking a crucial step forward for the South African startup ecosystem. The VC FoF has garnered significant interest from institutional and pension fund investors, demonstrating the growing confidence and recognition of the venture capital asset class. Notably, the SA SME Fund, together with USAID, has incorporated a first loss capital layer into the VC FoF, reinforcing the commitment to support and minimize risks associated with venture capital investments. Furthermore, contributions from the Department of Science and Innovation, as well as the Consolidated Retirement Fund for Local Government, represented by Sukha and Associates, have strengthened the fund’s capital base.
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With its involvement in 16 funds encompassing venture capital, debt, and private equity, the SA SME Fund has already catalyzed over R3 billion of additional capital to its partner funds. Now, with the launch of the VC Fund of Funds, the organization intends to continue its venture capital strategy, placing a particular focus on providing later stage funding to startups in South Africa. As they seek superior risk-adjusted returns, the VC FoF maintains a clear mandate for driving transformation and promoting inclusive growth within the entrepreneurial ecosystem.
Undoubtedly, the SA SME Fund has played a pivotal role in scaling the entrepreneurial landscape and startup ecosystem in South Africa. Through their provision of catalytic capital, they have become instrumental in realizing the country’s entrepreneurial potential. The establishment of the VC Fund of Funds is a significant milestone that solidifies venture capital as a credible and vital asset class within the South African investment landscape. Adrian Gore, the chairperson of the SA SME Fund, expressed his excitement about the impact they have made in fulfilling the country’s potential and fostering an environment where innovation thrives.
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Acknowledging the remarkable achievements of the SA SME Fund, Keet van Zyl, the founder of Knife Capital and one of the Fund’s partner funders, expressed gratitude for their support. He emphasized the Fund’s pivotal role in the growth of the South African venture capital industry, effectively doubling its size through their investment program. The partnership between Knife Capital and the SA SME Fund holds great promise for a prosperous future, creating opportunities and nurturing the next generation of successful startups in South Africa.
In summary, the successful completion of the first close of the R1 billion VC Fund of Funds by the SA SME Fund marks a significant achievement for the South African startup ecosystem. Their visionary approach, commitment to catalytic capital, and emphasis on transformation have elevated the status of venture capital as a credible asset class in South Africa. The impact of their efforts in scaling the entrepreneurial landscape and supporting startups is immeasurable, and their partnership with visionary investors and funders solidifies their position as a driving force behind the country’s innovation and economic growth.
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