Last month, South African Section 12J venture capital company Kingson Capital launched its second fund, which will invest in high-growth tech and black-owned small and medium sized enterprises (SMEs).
The new fund will see Kingson Capital, founded in 2015, continue on its mandate of investing in entrepreneurs with unique and scalable business concepts, whose products change the current landscape and existing business models.
So far, so standard, especially given its 12J status, meaning investments made in its fund are tax deductible. But Kingson came about in a way that is very different to many other VC firms when it was founded by Gavin Reardon, a qualified chartered accountant.
“Prior to starting Kingson I was CFO of a financial services business. I have always loved creating business value and developing new things; getting into the world of startups is the best of both combinations and something I enjoy very much,” Reardon said.
Yet when Reardon launched his own business and came to require funding, he saw something further.
“It started out with me looking for funding for my own tech startup. I saw the opportunity for something far bigger and set out to create a fund that could invest in multiple startups,” he said.
Kingson invested in 10 startups from its first fund, and its second one, which is capitalised predominately by high net worth individuals and corporate offices, will invest across all stages.
“We are interested in tech across financial services, insurance and health. We also look at engineering and tech in the manufacturing sector,” Reardon said of Kingson, which only invests in South African companies.
He believes it is a very exciting time to be in the tech space.
“There has been good growth and smartphone penetration is making tech even more accessible to the masses. We see a great opportunity to expand our pool of startups into other African markets. We see fintech being an important role player as Africa leapfrogs across more developed nations in the tech space,” said Reardon.
However, he feels the ecosystem is still too small and fragmented.
“Some great efforts are being made in this space but one of the things that startups lack is the mentor and network benefit that more mature VC markets have,” he said.