New $37.4m fund for South African SMEs announced

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South African firms Newtown Partners and LionPride Investment Holdings have announced plans to raise ZAR500 million (US$37.4 million) for a co-managed Section 12J technology investment fund.

Newtown Partners, founded by Vinny Lingham and Llew Claasen, and Lion Pride Investment Holdings said the LionPride Agility fund will focus on impact investing and emerging technologies.

This structure enables investors to invest capital into one of two capital pools co-managed by LionPride and Newtown Partners, as well as gain balanced exposure to early-stage South African technology businesses or concentrated exposure into a selected theme according to their desired risk allocation.

A major benefit of a section 12J investment fund is that investors can deduct 100 per cent of their investment from their taxable incomes in the tax year in which the investments are made.

“We believe that we’re taking a bold approach that will catapult economic transformation in South Africa. The tax deductible ‘discount’ that a section 12J Fund provides is a great incentive for investors to invest in projects of a developmental nature that can positively impact employment in South Africa,” said Deven Govender, LionPride’s chief executive officer (CEO).

SMEs that fall within fintech, agri-tech, on-demand services, business process outsourcing, renewables, healthcare, 4IR and ed-Ttch will be the focus of the LionPride Agility VCC Fund. Lingham said it had enormous potential to build globally successful technology businesses from South Africa.  

“I’m looking forward to giving many more South Africans the opportunity to really make a dent in the global technology markets through this Fund. We’re also excited about the opportunity to positively impact economic empowerment in South Africa and the LionPride Agility fund is an important tool to achieve that,” said Lingham.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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