The new:
- A consortium — comprising key institutions like the SA SME Fund, the Department of Science and Innovation (DSI), the Technology Innovation Agency (TIA), and E Squared Investments — has launched a R300 million (approximately $17 million) seed fund to support tech startups in South Africa.
- The fund, which will exclusively provide early-stage capital funding to local startups, aims to address a critical funding gap for emerging technology-driven businesses in South Africa.
- The initiative, dubbed the "Seed Fund of Funds," aims to provide seed capital to at least 50 startups, with a focus on fostering innovation and transformation in South Africa.
Managed by “experienced fund managers,” the fund will help entrepreneurs turn their innovative ideas into viable enterprises with the potential to scale both locally and globally.
Ketso Gordhan, CEO of the SA SME Fund, emphasised the importance of seed capital in driving entrepreneurial success.,
“Seed funding is the lifeblood of innovation and entrepreneurial growth. Without it, many great ideas would never see the light of day. This fund will ensure that South Africa’s brilliant minds have the resources they need to succeed.”
South Africa’s venture capital ecosystem has traditionally focused on later-stage investments such as Series A and Series B, leaving early-stage startups with limited access to funding. This fund aims to fill that gap, ensuring that emerging entrepreneurs can thrive in a supportive environment.
The fund’s backers believe that supporting tech startups will also contribute to job creation and economic transformation in South Africa, which is in line with global trends where technology companies are major job creators, especially in innovation-driven sectors.
Over the coming years, the fund will deploy capital through five skilled fund managers, ensuring that South Africa’s venture capital industry remains sustainable while empowering the next generation of tech entrepreneurs.
Per TIA’s acting CEO, Patrick Krappie, “This fund will play a catalytic role in building the foundations of a strong seed-stage funding ecosystem.”
E Squared Investments, an impact investor committed to driving transformative change, is a key player in the fund. CEO Gladwyn Leeuw noted that making strategic capital accessible to tech startups is vital for innovation and economic growth.
