So you’re a startup, and you have a great idea. In fact, your idea is going to change the world. It’s better than Facebook. But you have no money. You need a venture capital firm to take pity on your poor soul (and make a truck load of cash from your great idea).
South Africa’s venture capital space is growing quite nicely. With startups funded by the country’s firms exiting to big multinationals like Visa, it’s no wonder the startup scene in South Africa has a seemingly cool visage.
In the last year more than 30 startups received funding, won competitions and exited. It’s a growing space and things are becoming hotly contested. Despite a not-so-great economic outlook, there are companies, VCs and Angels out there willing to invest in companies that have the right stuff. That’s important, having the right stuff.
If you are a startup though, you should be warned: VCs are like dragons. In their eyes, startups must step up and be leaders of their industry and set the pace for innovation or die (or go work for a corporate). It is a deadly game of “love my product” out there — consumers can be oh-so-fickle, and the dragons of investment will not back weaklings.
As an entrepreneur you probably have an innovative idea and your product is a sure-fire win, but you don’t know who the dragons are or how to venture to their lair armed with your excellent business plan. Don’t worry, we did some research and found some very capable and successful dragons dying to tear you… I mean, hear your proposal.
In no particular order:
Invenfin describes itself as a seed and early stage venture capital fund. “Our funding requirements are flexible but all investments must have unique intellectual property,” says the company’s website. The firm’s investments don’t discriminate according to industry: if it is innovative, unique and has a sound business model, then investors at Invenfin will do their level best to make sure the business gets funded.
Hasso Plattner Ventures Africa
An affiliate of Hasso Plattner Europe, HPV Africa was founded in 2008 with €29-million. “We invest in innovative technology companies with a proven track record of growth and a business model that is substantiated by the generation of historical revenue,” says the company. It specialises in VC and growth funds. If you have a great tech startup with some global ambitions and a good track record, HPV may be interested.
These guys are all about the early stage tech stuff, so you want to go to them with a solid idea and plan. Its “Early-Stage Technology Fund 1″ is aimed at startup investment opportunities with big growth potential at the seed and early stages in the mobile, enterprise software and web sectors.
There’s nothing like a big tech company wanting to foster growth and entrepreneurial spirit. The company’s mission is quite simple: it wants to spur innovation and inspire entrepreneurship. “As a stage agnostic investor, we have helped companies of virtually every size reach their next level,” says Intel Capital. The company looks at tech investments, talented developers and providers of hardware, software and services.
Another tech-focused firm, Knife Capital describes itself as a growth equity fund manager with a specific focus on “technology-enabled” ventures. The company wants startups that will make a sustainable impact on innovation. “Our strongest investment interest is in companies which, through technology and innovative management, seem capable of turning African solutions into successful businesses,” says Knife. Interestingly, the company was named South Africa’s best VC last year. Stylish. Knife Capital are also related to AngelHub, the angel investor group, these guys really want to hear you pitch.
These guys are all about private equity. Essentially, the company manages funds on behalf of some very rich individuals as well as a select group of institutional investors who might want to invest in your startup. Acorn has a few funds that invest in a range of sectors. Its tech fund invests in tech startups with an “enterprise value of up to R200-million and pre-tax profit of up to R50-million at the time of investment”.
eVentures Africa Fund
eVentures Africa Fund (eVA Fund) claims to be the first venture capital firm investing in African SMEs active in digital media. Its mission? “To capture the vast potential of digital media in sub-Saharan Africa, thus bridging the so-called ‘digital divide’ and in doing so, generating attractive financial returns for our investors.” The fund was started in 2010 and has a sub-Saharan Africa target market.
Part of a global investment group, the company “prides itself in being an active, long-term investment and funding partner, to take a company from good to great”. Its investment remit includes healthcare, primarily biotech, and saving the planet with renewable energy and security.
Because someone has to save the planet, Inspired Evolution is all about “clean tech”. The company describes itself as focused on “advancing the development and use of clean technologies across new energy and environment markets”. The firm also manages Evolution One Fund, a dedicated third-party Clean-Tech investment fund. So all you startups that want to clean up the planet with tech, these guys are waiting.
IDF Managers invests in women and the youth. According to the company it’s “an entrepreneurial SME development financier that provides innovative financial and non-financial support services to black owned, women owned and youth owned businesses”. The company manages four funds on behalf of institutional and corporate enterprise development investors and it is not sector specific.
If none these companies fit what you want to do, no worries — there are plenty more here.