The R1.4-billion SA SME Fund has committed R110-million to Cape Town based hardware tech incubator Savant, with 50% of this amount earmarked for black African owned firms, the fund’s CEO Ketso Gordhan revealed today.
The idea is that R100-million of the R110-million from SA SME Fund, will be committed towards the first close of a R100-million Savant venture fund that will invest in hardware tech businesses with products that are ready for market, Savant CEO Nick Allen (pictured above, left signing the deal with Gordhan yesterday – 7 February) told Ventureburn today.
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The fund, which is capitalised by 48 JSE-listed firms, was launched in 2016 by Discovery CEO Adrian Gore and former Bidvest chair Brian Joffe under the CEO Initiative, in which the government aimed to get the private sector to resuscitate the economy.
The R100-million first close is expected to benefit between 10 to 15 ventures, said Allen.
Gordhan said half of the R110-million will be invested in black African-owned businesses.
The SA SME Fund’s remaining commitment of R10-million will be set aside for a seed fund which will be aimed at pre-revenue hardware tech businesses that are not yet market ready.
Allen said Savant is looking to bring in other investors and interested partners for its ventures fund and has a targeted next close of R200-million.
In November last year Gordhan told Ventureburn that the SA SME Fund had made an undisclosed investment into a private-sector fund that supports the commercialisation local hardware inventions. The deal however was only in fact sealed yesterday.
While Gordhan called Savant one of the “few leading players” in the hardware technology sector in South Africa, Allen today described the deal as “the next phase in the evolution of the sector”.
Allen said the SA SME Fund will play a role in Savant’s investment committee. “Their success is tied up in our success,” he said.
Savant’s venture fund is currently conducting due diligence on its first investment and he expects that Savant will likely make a decision on its first investment by the end of this month.
Allen said Savant already has “a number” of black-owned businesses in its portfolio and that the incubator is looking to fund more businesses from outside the Western Cape.
He said Savant has “long wanted” to set up an incubation office in Johannesburg.
“Depending on the size of the fund, it’s something we are keen to do,” he said. He hinted that this would likely start with a virtual office.
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Featured image, left to right: Savant CEO Nick Allen and SA SME Fund CEO Ketso signing the deal yesterday (Supplied)
