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

Kalon Venture Partners, a digital technology venture capital firm based in South Africa, has successfully concluded its final Section 12J capital raise, with assets under management totaling over a quarter of a billion rand. Kalon’s first fund, which launched in 2016, invested in nine disruptive technology businesses, and its second fund, which launched in 2017, invested in seven of them. Kalon is now looking for South African entrepreneurs who can help it deploy its cash reserves.

“The Section 12 J initiative enabled South African investors to participate in the exciting venture capital asset class. The Section 12 J initiative was born in 2009 to raise capital to assist early-stage entrepreneurs to grow their businesses,” CEO Clive Butkow said.

“During the last few years, there have been many accusations of the initiative being abused by certain fund managers”. Butkow noted on the premature ending of the Section 12 J sunset clause, “it was short-sighted and I believe the government through the baby out with the bathwater rather than extending the legitimate 12 J’s”. 

Kalon’s investments have already resulted in the creation of over 200 employment.

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What Kalon Venture Partners Offers

Kalon invests in South African entrepreneurs with breakthrough technological solutions and helps them scale their businesses both locally and globally. Kalon’s senior and non-executive teams have extensive expertise creating and scaling global enterprises.

“Having been involved in building many technology businesses, we provide more than financial capital but operational skills in helping scale the businesses. We are the operators behind the entrepreneurs and our “High Touch” approach is what many entrepreneurs are looking for to scale their businesses,” Butkow noted.

In South Africa, there are a few seasoned tech venture capital (VC) firms. Kalon Venture Partners provides more than just finance; it also provides mentorship, relationships, and assistance.

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“Great VCs understand that investing in companies marks the beginning of the journey and not the end of the process”, Butkow said.

Clive issues a caution before granting access to Kalon’s abilities.

“We look for the best entrepreneurs and teams, the technology we invest in must have a competitive edge that are 10 X better, faster, cheaper than their competitors. Kalon also look for businesses that display good traction with a large addressable market.”

Kalon’s criteria ensure that they exclusively invest in the greatest technology firms in South Africa.

Kalon Venture Partners Kalon Venture Partners

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 writer