Update: Are you a venture capitalist or an angel investor looking to invest in a company? Are you an entrepreneur looking for capital or other opportunities? Are you an aspiring startup owner looking for assistance? Well, you have come to the right place. Ventureburn presents an updated guide to South Africa’s startup scene.
This article is the most comprehensive guide for anyone who wants to get involved with, or have a better understanding of, the country’s fast-growing startup space. It is a part of a series of articles we will pilot, which will also include the West African and East African startup space.
We have scoured South Africa’s entrepreneurial landscape and hand-picked some of the top players to get you started, looking at all sectors from education, investment (angel, venture capital, private equity), government, accelerators and incubators to media players (print and online).
Bookmark this one. The intention is for this article to be a living thing, which will grow into the ultimate resource for South African tech startups and entrepreneurs. Also, with your comments and suggestions we hope to create a clear overview of the people and organisations that influence and shape South Africa’s tech venture space.
Venture capital is all about early-stage, high-potential, high-risk, growth startups.
For a comprehensive list of venture capital and private equity firms check out the South African Venture Capital & Private Equity Association (SAVCA). Our picks are known tech startup investors.
AngelHub Ventures started out as South Africa’s “first group of angel investors” that provides pool funding, expertise and networks to foster startup growth. Angel investors Michael Jordaan (the ex-FNB head) and Kevin Harris joined from 2014 and the firm upgraded to a VC. Under the leadership of Brett Commaille, the firm has been supporting startups like GoMetro, Snapplify and AmaLocker.
Founded by Michael Jordaan, MonteGray provides seed and growth capital, strategic advice and access to networks. The businesses it invests in are all focused on solving everyday problems. For instance, Snapplify is a digital publishing solution while Project Isizwe’s provides free WiFi in low-income communities.
4Di Capital prefers early-stage tech investments. 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. Some of the companies in its portfolio include HealthQ, SMEasy and Bloodhound.
Knife Capital is a growth equity fund manager with a specific focus on sustainable technology-enabled ventures. The company was named South Africa’s best VC in 2012. Some more recent achievements include the exit of radar startup iKubu to Garmin in 2015.
Business Partners funds startups in the clean energy, agri-processing, biotech and ICT sectors up to R25-million. Earlier this year, the firm launched a R250-million fund to support women in business.
Grovest Venture Capital Company (VCC) claims to be South Africa’s first VC company incorporated under Section 12J of the Income Tax Act — a new asset class in the country that has proven to be successful in the UK and sees VC companies traded as venture capital trusts. The VC structure offers investors exposure to the VC sector, while at the same time providing up to 40% tax relief on their investments. Grovest looks for technology-focused South African private companies. The company invested in SMEasy in 2015.
The Omidyar Network is active across the African continent, as it is around the world. Founded by Pierre Omidyar, the founder of eBay, the initiative has not only established itself as a leader in intelligence and advocacy in the region’s startup ecosystem, but has been funding a range of ventures from Lagos to Cape Town and Nairobi. Besides providing venture capital, the Omidyar offers human capital capabilities, from serving on boards to consulting on strategy, coaching executives to recruiting new talent. Some notable South African investments include online distribution network Bozza, education programme IkamvaYouth as well as fact-checking media outlet Africa Check.
Silvertree Capital (also known as Silvertree Internet Holdings) supports and invests in startups targeting the South African and sub-Saharan African markets. Within the first half of 2015, the firm has invested R20-million and has enjoyed month-on-month revenue growth of over 10% across its portfolio.
eVentures Africa Fund was launched in 2010 by Vincent Kouwenhoven and Brian Hirman. The fund leverages capital and experience from Europe to invest in internet-related companies in Africa. Some of the firm’s notable investments include South Africa’s Nomanini and Nigeria-based MoboFree.
Seedstars World, as the name suggests, is a global venture capital firm based in Switzerland. Startups from a growing number of emerging markets — including South Africa — are invited to pitch and take part in the international competition where they’ll stand a chance to win up to US$500 000 in equity investment.
Capria Acclerator is worth a mention too. Though not focusing on early-stage investment into startups directly, the programme acts as a global VC and accelerator for other VCs. It focuses on supporting fund managers in South Asia, Southeast Asia, Africa and Latin America. It has a track record of raising over US$1.2-billion in India, and plans to expand beyond those borders.
An incubator brings in an outside team to manage an idea that was developed internally and takes a larger chunk of equity in the resulting company.
Founded in 2000, Raizcorp is the only unfunded for-profit business incubator in Africa. It has seven physical incubators in South Africa and one in Angola. To date, 900 companies have graduated from Raizcorp. Late in 2014, the organisation partnered with the South African Communications Forum to help set up an initiative worth R10-million to support black-owned tech SMEs.
Forming part of CiTi (see networking organisations below), Bandwidth Barn has been in operation since 2000 and is today regarded as one of the leading ICT business incubators in the world. The initiative has also been behind the setting up of a Bitcoin hub as well as Virtual Reality community — both a first in South Africa. In 2015, the Bandwidth Barn also unveiled Barn Khayelitsha — a co-working support hub for entrepreneurs in the area.
The RLabs Innovation Incubator provides entrepreneurs with a shared space to develop their ideas with help from an experienced developer and entrepreneurship network. Ventures that have a social impact, are sustainable and show potential for growth are welcome.
JoziHub wants to transform the technology industry by connecting potential entrepreneurs and developers with the critical resources they need. It has backing from heavyweights such as Omidyar and Google.
The Shuttleworth Foundation looks for “amazing people”, gives them a fellowship grant, and multiplies the money they put into their projects by a factor of 10 or more. Startups that receive fellowship grants get office space for a year during which their ideas are developed.
Impact Amplifier focuses on supporting entrepreneurs who tackle Africa’s socio-economic and environmental challenges. It acts as both an incubator for high-growth, high-impact businesses and as a consultant for big business.
The Awethu Project is pioneering a new approach to identifying talented entrepreneurs in under-resourced South African communities. Its applicants don’t need any minimum level of education, business experience, capital or even an investable idea. The only requirement is that an applicant comes from an under-resourced background and can prove that they have world-class entrepreneurial potential through Awethu’s Talent Identification Process.
Seed Academy offers a range of different support programmes for entrepreneurs. From its 10-week Think. Be. Do. programme to an incubation support programme that runs between six and 24 months, the organisation offers coaching, workshops, tools and more.
Standard Bank launched its Standard Bank Incubator Programme in 2015 to educate, create, empower and develop entrepreneurs in South Africa. The programme is accompanied by the incubator co-working space in Rosebank, Johannesburg.
Cape Town-based Entrepreneur Incubator and Academy offers virtual incubation for innovative entrepreneurs. The initiative offers three levels of support, ranging from an accelerator “for newbies” to coaching and education for more established businesses. Headed by business coach Bruce Wade, the platform is also responsible for a YouTube series called Bruce on Business which aims to inspire and empower businesses.
Based in Stellenbosch the Nedbank LaunchLab offers a range of services to entrepreneurs from the local university and outside. With programmes such as Lift-Off, internship opportunities, and startup acceleration, the initiative aims to facilitate the growth of the overall entrepreneurial ecosystem.
An accelerator does exactly what its name suggests — helps businesses accelerate growth. For the most part, an accelerator differs from an incubator in that programmes usually run for shorter periods, often ranging between three and six months. The programme usually rounds off with a demo day where startups pitch their ideas to investors.
The 88mph accelerator started in Kenya, and later moved to Cape Town where it merged with Google’s Umbono programme for entrepreneurs, and was subsequently called Google for Entrepreneurs. The three-month programme runs in Nairobi and Cape Town and sees simultaneous investments upwards of US$100 000 in 10 to 12 startups. Funding, entrepreneurs-in-residence and office space is provided. In 2015, the organisation announced that it was taking a break from investing. Instead, it will focus on its existing portfolio to get good return for its investors and founders.
South African growth equity fund manager Knife Capital runs the later-stage business accelerator, Grindstone, in order to assist high-growth technology enabled SMEs to become sustainable and fundable. In 2014, the accelerator reported a 61% increase in revenue for all its companies.
The Founder Institute is an early-stage startup accelerator and global launch network with a part-time four month programme. The idea is that entrepreneurs can launch their dream company with training, feedback, and support from experienced startup CEOs, while not being required to quit their day job.
mLab Southern Africa is a vertical accelerator that focuses on mobile innovation and startups. It offers a number of support services including mentoring, development, infrastructure, funding and access to industry players and government locally and internationally. mLab is backed by the World Bank, infoDev, the Ministry of Foreign Affairs of Finland & the Department of Science and Technology.
Barclays Africa launched its Tech Lab Africa programme in Cape Town in 2015 to connect startups, corporates and innovators with a global network to help scale innovative solutions. The initial programme is 13 weeks long and seeks to accelerate South Africa’s financial technology and digital health industry.
Launched in 2015, New Ventures Studio is a young entrepreneur accelerator in Cape Town. The Studio partners with 16 to 35-year olds to accelerate an idea or startup into a repeatable and scalable business model. Entrepreneurs are vetted through an experiential eight-week entrepreneurial course at the end of which they pitch to enter an incubator offering physical space, mentorship, specialised startup or acceleration services and capital raising.
Part of a global startup support initiative, Microsoft’s BizSpark Accelerator programme has partnered with South African government’s Jobs Fund to offer support and mentorship to small businesses. The overall programme currently supports around 1 665 SMEs in the country.
Claiming to be the largest of its kind, Sw7 (Start With Seven) is behind a nine week part-time evening mentor-led programme. The organisation works with over 150 businesses and is a Microsoft Bizspark Plus partner and runs the technology accelerator for Standard Bank.
Whether or not angel investing is on the rise in Africa as it is in the US, South Africa has its fair share of wealthy individuals with investment sense.
Former CEO of FNB Michael Jordaan, owner of Bartinney Wines, and Mike Ratcliffe, managing director at Warwick Wine Estate, each made an angel investment in 140 character social wine review service, Real Time Wine. Though the startup ended up tanking, Jordaan is still not shying away from placing his bets, mostly investing through MonteGray and AngelHub Ventures.
A dragon from the live investment show, Dragons’ Den, Vinny Lingham is an early backer of many South African startups. Lingham, together with business partner Llew Claasen, is behind angel investment firm Newtown Partners, which has a stake in SAFlorist, SweepSouth, WumDrop and many more.
Co-founders of Groupon SA Wayne Gosling and Daniel Guasco often work side by side. Regular features at events such as Net Prophet’s Sparkup Live, some of these investments include 8Bit, WumDrop, Receiptful and Ekaya.
An advisor to Swyft and Gyft, Michael Leeman, is behind four startup exits, including Gyft and Clicks2Customers. Other investments include Chesscube and, more recently, Adii Pienaar’s Receiptful. Leeman is the founder of Miombo Capital.
Private equity firms differ from their venture capital counterparts in a fundamental way. Private equity is about taking a company at later stage in its development and restructuring it to optimise its financial performance.
The private equity firms listed here have made notable investments in tech startups.
Ethos Private Equity has been around for 25 years and has raised four funds, the latest of which tops US$800-million. Ethos seems to invest in a range of markets including tech — it has an investment in Clickatell, the bulk-SMS service provider.
Acorn Equity 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. The targeted investment size per transaction is R30-million to R80-million. Its portfolio doesn’t yet include a tech investment for its Acorn Venture Technology Fund One.
Horizon Equity‘s portfolio includes quite a few tech investments. It invests amounts from R10-million to R100-million into privately held South African companies from early stage through to pre-listing, including management buy-outs.
Sasfin Private Equity will only look at startups valued at R50-million upwards with an annual turnover of more than R30-million. Sasfin requires an equity share of 20% to 49% and “committed and competent management with a proven track record.”
Kagiso Tiso Holdings has a private equity arm with a focus on black economic empowerment (BEE). The firm typically invests between R20-million and R70-million in its portfolio companies, in exchange for a minority equity stake of between 20% and 50%.
Impact Amplifier aims to address socio-economic and environmental challenges, innovative entrepreneurs and business models must emerge in South Africa and the greater continent. This is done by providing investment readiness and advisory services to businesses.
Whether you’re looking for talent, inspiration or partners, networking organisations are the facilitators between startups, investors and other stakeholders of the industry.
The Entrepreneurs Organisation (EO) is a global business network of 8 000-plus business owners in 122 chapters and 35 countries. Founded in 1987 by a group of young entrepreneurs, EO enables small and large business owners to learn from each other, leading to greater business success. Read more about the South African chapter of EO.
PricewaterhouseCoopers (PwC) has been making a big impact in the local industry. With a focus on emerging companies, the multinational is behind the Vision to Reality awards programme which seeks to celebrate innovation and upcoming software businesses. Finalists of the programme have access to the company’s mentorship initiative as well as access to local and global industry leaders and strategic advisors. PwC also this year released its emerging companies survey, which reveals the challenges and opportunities South African companies face.
Endeavour seeks to identify and assist high-growth entrepreneurs in emerging markets around the world. The entrepreneurs cultivated by Endeavour in turn help create jobs, propel economies, and cultivate leaders and role models.
Silicon Cape is a non-profit, community owned and driven initiative that aims to improve the environment in the Western Cape to create more and better startups as well as increase access to capital.
Situated in Stellenbosch, the Nedbank-backed LaunchLab forms part of the local university’s Innovus initiative which is responsible for technology transfer, entrepreneurial support and development, and innovation at the university. The LaunchLab is behind a range of services for both established and budding entrepreneurs, offering incubation space, pitching competitions, workshops and more.
Tech in Braam is connecting IT entrepreneurs and professionals with the aim of creating and growing a world-class technology sector in Johannesburg.
The Sable accelerator is an international partnership group dedicated to helping South African entrepreneurs, new venture startups, academic institutions and companies commercialise technology innovations, promote and protect intellectual property, fund new business concepts, finance growth, as well as expand into global markets. Sable is powered by MentorCloud, the cloud-based mentorship platform, which also works with the University of the Witwatersrand Alumni Association, powering their mentoring programme between alumni and students.
Simodisa aims to empower startups in South Africa. Apart from various startup-focused events during the year, it seeks to act as facilitator between government and private bodies. The initiative represents a collaborative research, stakeholder engagement and policy design effort by key stakeholders from both the public and private sector in South Africa.
The Cape IT Initiative (CiTi) is a non-profit organisation focused on supercharging the Western Cape’s technology sector as well as tech-enabled industries like financial services, retail and government. It considers itself a “mothership” for a number of initiatives in support of startups, skills development, cluster development, research and market growth programmes. Under the new leadership of Ian Merrington, CiTi has secured a multi-million rand backing from Telkom.
The Branson Centre for Entrepreneurship based in Johannesburg provides free training, mentoring and other networking and marketing platforms for entrepreneurs who demonstrate the potential to move their small business to the next level of growth.
Launched in 2015, AlphaCode wants to be the club for next-generation entrepreneurs in South Africa’s financial services industry. With its co-working space based in Sandton, Johannesburg, the initiative has a range of membership options available with benefits that range from facilitated networking, access to the working space, mentorship and more.
Backed by US$100-million, the Nigerian billionaire, Tony Elumelu, launched the Tony Elumelu Foundation Entrepreneurship Programme in 2015 to support a total of 10 000 entrepreneurs across the continent.
The V&A Waterfront’s Workshop17 officially opened its doors in 2015 with the aim of fostering collaboration and innovation in the country and the greater region. Besides a co-working space, the hub is responsible for talks, lectures, workshops and educational programmes.
Similar to networking bodies, conferences are seen as key players in celebrating the startup space. These initiatives are often accompanied by pitching competitions, keynotes and networking.
Net Prophet is an annual conference that is laser-focused on startups and entrepreneurship. Every year entrepreneurs in the Internet space share their stories, ideas and predictions for the future in a format that is fresh, relevant and engaging.
Tech4Africa is one of Africa’s biggest mobile, web and emerging technology conferences and brings a global perspective to the African context. Each year it hosts the Ignite startup competition which gives African startups exposure to “investors, mentors, thought leaders, buyers, decision makers, journalists, influencers and potential recruits.”
Startup Grind is an international organisation that hosts monthly fireside chats with local industry entrepreneurs and startups. The initiative has growing chapters in Johannesburg, Durban and Cape Town. Founded in 2010, its vision is to connect startups and the people behind them, tap into a strong support network, form meaningful connections and gain inspiration for the startup journey ahead.
Launched in 2014, Entrepreneur Traction‘s aim is to bridge the gap between potential young tech entrepreneurs with top level CEOs, VC’s and influential speakers. and help grow a strong network of like-minded driven entrepreneurs from around South Africa.
A flagship of LIONS@FRICA, DEMO Africa is an annual pan-African pitch competition and conference dressed as a launchpad for emerging technology and trends. LIONS@FRICA was launched by the US Department of State, in collaboration with Microsoft, DEMO, USAID and Startup Weekend.
Startup Weekend (Cape Town, Durban and Johannesburg) is part of an annual grassroots movement of active and empowered entrepreneurs who are learning the basics of founding startups and launching successful ventures. Active in over 200 cities around the globe, the three-day event is filled with networking, pitches, mentoring and awards.
While not exclusively focused on entrepreneurship, the inaugural Citadel Inspiration Indaba is a one-day event that shares the stories of passionate, successful and inspiring South Africans.
With the popularity of crowdfunding platforms like Kickstarter in the US and Europe, new initiatives tailored specifically for businesses have emerged, but in South Africa this has yet to prove itself as a viable option for startups.
Today, the local scene is dominated by Thundafund which focuses on all kinds of initiatives, whether that be helping hobbyists bring their ideas to reality or a startup seeking funding. A marketplace for creatives and innovators, the organisation is also behind Ripple which is focused on support social initiatives and change-makers.
Without media, there’s no story. Along with the “African rising” narrative and more international interest in the continent as a region for investment opportunity, an increasingly large number of publications from abroad are interested in telling the country’s stories, amplifying their reach.
Entrepreneur Magazine is touted as South Africa’s best-selling entrepreneurship magazine. It’s also a great online resource for general topics and tips on entrepreneurship.
TechCentral has a very strong South African flavour. Its focus is more on general technology news, but it also publishes entrepreneurial stories.
US publication Quartz launched its African chapter in 2015 with a focus on unique, insightful articles that are often technology-focused and startup related.
Popular US magazine Fast Company launched its first English edition outside of its home country in South Africa. The publication offers a range of different content, with a main focus on feature-length profiles of industry leaders or startup founders.
Disrupt Africa aims to be the go-to source for all things startups, investments and innovation in North, East, West and Southern Africa. Alongside news articles, the site also focuses on interviews and stories on important stakeholders of the industry.
Hypertext Media Communications (or simply known as htxt) covers South African news on startups, women in tech, games and makers. The site aims to become the number one community for interesting stuff coming from South Africa and the rest of the continent.
As research in Omidyar’s Accelerating Entrepreneurship in Africa report suggests, management and other entrepreneurial skills should be fostered in schools.
The online education venture, GetSmarter, presents a collection of 10 courses covering different aspects of entrepreneurship. These topics range from how to Start and Manage a Small Business to the Basics of Financial Management. Time it takes to complete these courses range from six to 12 weeks. The organisation has also partnered with CiTi and Barn Khayelitsha‘s business development programme to support entrepreneurs.
Regenesys Business School provides free, fully accredited, internationally recognised online business education for South Africans.
In 2012, the UCT Graduate School of Business (UCT GSB) teamed up with growth equity fund manager Knife Capital to launch the Find Make Grow Realise education programme to promote the development of early-stage, high growth entrepreneurial activity in the City of Cape Town. Today, other short courses on offer by the GSB include the Business Acumen for Artists and Masterclass: Business Model Innovation.
Omidyar Network’s African Leadership Academy (ALA) is a South African-based educational institution that identifies the most promising 16- to 19-year-olds from all 54 African nations for an innovative, two-year program focused on leadership, entrepreneurship, and African studies.
IBM’s Africa Innovation Centre in Johannesburg, launched in June 2008 as an enablement facility for crucial ICT skills such as Software Development. It aims to advance the creation of local jobs.
The University of Stellenbosch in Cape Town runs the MIH Media Lab which emphasises applied research — by students with engineering or computer science degrees — with projects that have a good chance of producing prototypes or proofs-of-concept that could eventually be commercialised.
Business Bridge, a not-for-profit organisation, is attempting to start a movement which enables experienced business people, entrepreneurs and business school alumni, the opportunity to share their knowledge on aspects related to starting and running a business, with entrepreneurs in historically disadvantaged communities.
MasterStart launched its online learning platform in 2015 for people who want to learn how to start their own ecommerce stores. Users are able to learn from the paid course through twelve different sections. These sections cover an introduction to ecommerce, e-marketing for beginners, sales, inventory management, and everything else needed in order to set up a shop.
Though somewhat less known than private funds, the South African government is behind a range of support programmes for entrepreneurs and innovation in the country.
The Department of Trade and Industry (DTI) pilots various programmes aimed at boosting the country’s economy. Its Support Programme for Industrial Innovation (SPII) and Small Enterprise Development Agency (SEDA) provide financial aid to small and micro enterprises.
The DTI’s Incubator Support Programme (ISP) encourages private sector partnerships with government to support incubators that develop micro and small businesses.
In the name of skills development and innovation, the DTI enhances cooperation between higher education institutions and industry through the Technology and Human Resources Programme (THRIP).
Through Khula, the DTI plays a complementary role to financial institutions, bridging finance gaps that are not addressed by commercial financial institutions in the small business sector. For example, many small businesses do not have assets to put up as collateral for a bank loan. To assist these businesses, Khula offers them a credit guarantee scheme.
The Industrial Development Corporation (IDC) provides finance for industrial development projects. The IDC invested in the animation industry when it awarded R17-million to Cape Town-based Triggerfish animation studios in 2009. The IDC launched the Startup Nations South Africa initiative in 2014 to unleash high-impact entrepreneurship and innovation.
Wesgro, the official destination marketing, investment and trade promotion agency for the Western Cape does its part to promote entrepreneurship. It recently published a report that showcases local startup success stories and support structures and it also runs the Western African Trade Corridor Programme — its latest programme focuses on exploring trade and partnership opportunities in Nigeria’s service sector.
Supported by DST, the Technology Innovation Agency (TIA) develops and nurtures technological innovation in order to improve economic growth in South Africa. In 2012, the agency approved a R100-million venture capital fund to help VCs fund startups.
The Innovation Hub launched in 2001 by the Gauteng Provincial Government with the aim of fostering socio-economic development and competitiveness in the region. The Innovation Hub is behind a range of projects such as mLab, eKasi Labs and the Climate Innovation Centre South Africa.
Apart from investing in the likes of Silicon Cape or setting up accelerators and incubators, South Africa’s banks aim to provide institutional support for the country’s small businesses.
Absa has the Small and Medium Enterprise Fund that will fund businesses that do not qualify for traditional bank credit due to a lack of a credit rating, security or capital. Loans between R500 000 and R1 500 000 are available, but they will only be given to businesses with 100% BEE ownership.
Among its bank loan products, Standard Bank offers Khula guaranteed loans — a loan type made possible through the DTI. The scheme is an indemnity to Standard Bank should the business fail to repay the loan. 50% to 90% of the bank loan can be indemnified under the Khula scheme. The maximum amount that can be approved under the scheme is R3-million.
FNB Private Clients, First National Bank’s specialist banking solution has partnered with business angel investor network AngelHub, to allow its wealthy entrepreneurs, business professionals and others to increase their asset values.
Arguably the bank with the most visible entrepreneurial focus is Nedbank. The bank touts its ability to offer “specialist business mentorship and technical assistance programmes like business strategy, problem diagnosis and financial management as well as access to all aspects of business training, workshops and seminars” to young businesses.
Nedbank offers free transactional banking for up to two years with a startup loan of R100 000 and its Nedgroup Investments Entrepreneur Fund invests in the shares of small- and medium-sized companies listed on the JSE — not surprisingly then, Nedbank has a private equity arm.
As far back as 2009, Nedbank has been investing in entrepreneurs when it launched a R3-million enterprise development project in partnership with Raizcorp, a private sector business incubator which saw 12 handpicked black entrepreneurs receiving support over a period of three years to develop their new enterprises.
If you’d like to add your organisation to this framework or suggest an additional category, please comment below or contact us.
Image by David Stanley via Flickr