The SA SME Fund and the Technology Innovation Agency (TIA) have announced a public-private partnership that will co-invest ZAR236 million (US$16 million) in two new venture capital funds.
Launched in 2016 and capitalised by almost 50 JSE-listed firms, the SA SME Fund is a “fund of funds”, and has so far assisted the likes of Savant, Akro and Knife Capital in offering investment and support to small South African businesses.
The new partnership with the TIA sees a further ZAR350 million (US$23.7 million) made available for investments in three funds. ZAR111.5 million (US$7.5 million) of that is for hardware incubator Savant, with that investment already public, but the other two recipients are new.
They are the OneBio Seed Investment Fund, a biotech dedicated fund, which has secured ZAR83.5 million (US$5.6 million), and the soon-to-be-launched University Technology Fund (UTF), which will invest in student-run startups and has bagged ZAR152.5 million (US$10.3 million) in funding.
All three of these funds will invest in early-stage South African businesses, as well as provide other forms of support. The SA SME Fund’s mandate to the three funds includes a requirement that they invest at least 50 per cent of the funding into companies owned by black entrepreneurs.
“We are hugely excited and energised by this partnership to support and invest in innovation, especially in black-owned startups and scale-ups in this space,” said Ketso Gordhan, chief executive officer (CEO) of the SA SME Fund.
“This forms part of our commitment to support government, together with TIA, in stimulating and intensifying technological innovation to improve economic growth, create jobs and impact on the quality of life of all South Africans.”
Fuzlin Levy-Hassen, interim chief executive of the TIA, said the new investment partnership was the result of the synergies that exist between government and the private sector.
“We are aligned in our vision of turning bright young minds into viable and sustainable business founders whose successes will create jobs and drive economic growth. The sophistication and creativity already evident in these businesses should make us proud as a country, and encourage us to further support innovation,” she said.