Knife Capital reveals deal with Swedish startup, bemoans lack of local funds

South African venture capital (VC) fund Knife Capital has co-invested in a Swedish startup alongside a Swedish fund, Knife Capital co-founder Keet van Zyl revealed today.

“We just made an investment in Sweden, in a Swedish startup and we are quite proud of it. It’s our first investment outside of South Africa that we’ve done and we are quite proud of it,” said Van Zyl.

Speaking at a Southern African Venture Capital and Private Equity Association (Savca) event held at the PwC offices in Cape Town today, he said Knife Capital would put out a press release likely next week which detailed the deal, which was made from the local VC fund’s London office. The office was opened last month.

‘It’s Knife Capital’s first investment outside of South Africa that we’ve done and we are quite proud of it’

Referring to the opening of the London office, Van Zyl bemoaned the lack of interest from local fund managers, saying it is difficult to raise funds locally.

Read more: SA VC firm Knife Capital expands to UK in deal with former rugby star Bob Skinstad

In comparison being based in London was easier as there are more family offices, while the market size (including greater Europe) is larger.

He said if South Africa is to attract more foreign funds into VC, the country needs to have more local institutional investors and more niche asset managers that are prepared to co-invest with foreign investors.

Van Zyl also revealed at the event today that Knife Capital is also doing a due diligence on a Kenyan deal, is busy signing the documents on a Cape-based VC investment and is busy on an exit for one of its portfolio companies “but that would probably be six or 12 months” from now, he added.