A new R300-million fund has been launched to invest seed capital in promising tech start-ups in South Africa. The Seed Fund of Funds initiative is backed by the Department of Science and Innovation, its entity the Technology Innovation Agency (TIA), and impact investors. The fund aims to provide early-stage capital funding to at least 50 technology-driven startups through experienced fund managers, with a focus on innovation and transformation in South Africa.
Ketso Gordhan, CEO of the SA SME Fund, emphasized that seed funding is the “cornerstone of entrepreneurial success and the lifeblood of innovation without which many great ideas would never see the light of day”. “South Africa has no shortage of brilliant minds, and this fund will ensure that more of them have the resources they need to succeed.
Seed funding boosts SA startups
Our goal is to make sure these companies have a fair chance at success and scale in the local and global markets,” Gordhan added. The founding parties noted that early-stage funding is a major gap in South Africa, where the venture capital ecosystem has historically attracted the lion’s share of investment into start-ups. Patrick Krappie, acting CEO of TIA, stated, “Governments across the globe play a crucial role in fostering innovation ecosystems, and South Africa is no different.
The partnership with the SA SME Fund aims to bolster funds towards start-ups and SMMEs through a fund of funds approach. We understand that early-stage ventures, especially those grounded in technology, need a supportive environment to thrive.”
“The Seed Fund of Funds will catalyse a wave of new start-ups by enabling them to transition from ideas to viable enterprises. This presents an opportunity for the fund to play a catalytic role in developing the country’s seed-stage funding ecosystem, building the foundations that will deepen investment into the innovation economy and placing the venture capital industry on sustainable footing for the future,” Krappie continued.
