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 & Innovation, the Technology Innovation Agency (TIA), and an impact investor. The fund aims to provide early-stage capital funding to local start-ups with a focus on innovation and transformation.
It plans to fund at least 50 technology-driven startups through experienced fund managers. Ketso Gordhan, CEO of the SA SME Fund, said, “This initiative aims to ensure that more brilliant minds in South Africa have the resources they need to succeed.
Seed Fund backs tech start-ups
Our goal is to make sure these companies have a fair chance at success and scale in the local and global markets.”
The founding parties emphasized that early-stage funding is a significant gap in South Africa, where venture capital tends to attract the lion’s share of investment into start-ups. TIA Acting CEO Patrick Krappie said, “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 aims to catalyze a wave of new start-ups by helping them transition from ideas to viable enterprises. This presents an opportunity to deepen investment into the innovation economy and strengthen the venture capital industry in South Africa.