Entrepreneurs for Entrepreneurs (E4E) Africa, a venture capital fund aimed at helping South African entrepreneurs build internationally-successful companies, has launched with backing from the SA SME Fund.
E4E, which is backed by a founding investment from the SA SME Fund and has a first close of R135-million (US$8.1 million), is run entirely by experienced entrepreneurs, with its six founding partners having had extensive success in the local and international startup ecosystem, both as entrepreneurs and investors.
The firm will support business models that bring innovative solutions to critical sectors of the South African economy, including financial services, healthcare, and the sustainable agriculture value chain, as well as those with the capacity to scale inside and outside of South Africa.
It will pay particular attention to supporting black and female participation in early-stage ventures, either as founders or as key players joining the scaling phase of investee companies.
E4E Africa managing partner Philani Sangweni said the fund was in the process of raising more money, and was also making significant progress on its first investments.
“Prior to establishing as a fund, we were entrepreneurs, angel investors and many of us mentored early stage ventures. This means we have a well-developed pipeline in place,” he said.
“As a result, we have approved two investments and expect to be able to close several other investments in the coming months. We have been really impressed with the quality of the entrepreneurs and business that we are seeing.”
Besides the founding team of six, the fund draws on a larger circle of experienced entrepreneurs to act as mentors to selected ventures. Partner Bas Hochstenbach said E4E was still welcoming experienced entrepreneurs and aligned institutional investors, locally and internationally, into its structure.
“Entrepreneurial expertise, deep sector experience and relevant contacts are critical to the success of our entrepreneurs. Investors that bring this help build a healthy startup ecosystem and drive good returns on their own investments,” he said.
Fellow partner Aisha Pandor, an E4E partner and also chief executive officer (CEO) of on-demand home cleaning startup SweepSouth, said she is constantly approached by early-stage entrepreneurs seeking guidance and advice on funding options.
“It is great to be part of a structure that can really transfer the experience, skills and contacts my colleagues and I have built up over the years to the next generation of entrepreneurs,” she said.
For the SA SME Fund, the quality and experience of the founding team is what attracted it to E4E.
“As part of our mandate to strengthen the South African economy, we were very keen to invest in a fund that brings together the power of a diverse group of experienced entrepreneurs,” said Ketso Gordhan, managing director of the SA SME Fund. “Experienced entrepreneurs really understand how to grow through the first hard years, and can deliver the skills and contacts that startups need to succeed.”