Investment firm Caban Investments is planning on raising a GBP60 million (US$85.2 million) fund, half of which will be used to back South African startups.
Caban, which is currently fundraising and will be listing on the London-based ICAP Securities & Derivatives Exchange (ISDX) this year, says the Caban Fund will be capitalised through London-based funds and will see a total of GBP30 million (US$42.6 million) made available for investments in South African companies.
Chief marketing officer (CMO) Dylan James told Disrupt Africa the fund was a departure from Caban’s usual model, which is based around the idea entrepreneurs require more than just cash to make their businesses successful.
“Caban was conceived on that premise, rather supply services than giving cash to entrepreneurs,” he said. “Once we have selected entrepreneurs, our undertaking is that once they have finished our process, they will have a fully operational business that is capitalised.”
The company provides startups with a line of credit to allow them to access services and mentorship from a pool of entrepreneurs of different disciplines, and is involved in 52 operations so far.
With the Caban Fund, this model will change, with James saying the company plans to invest directly in South African startups.He said it is Caban’s philosophy to be heavily involved in the companies in invests in.
“My phone is on 24/7 and I get calls from entrepreneurs all the time. In fact the biggest task is to keep entrepreneurs motivated. That is half the battle,” he said.
Caban has interests in renewable energy, tech, media and financial services, but is not industry specific.
“We believe in backing the jockey,” James said.
“We look at the entrepreneur. We prefer individuals that have failed and that are in trouble with financial institutions. An assessment is made whether the individual will fit into the Caban mantra. Then we analyse if there is a market for the product or service.”
Currently active in South Africa and the United Kingdom (UK), Caban sees Ghana as a springboard into West Africa, while in the next three years it plans to set up branches in Eastern Europe and India.
“South Africa is still the land of opportunity. South Africans are forced to be innovative due to the high unemployment rate. We are spoilt for choice in opportunities,” James said.