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Venture capital

  • Private equity returns up a whopping 123% in 2016 reveals Savca report

    South African private equity capital returns to investors were up 123.2% last year to R18.3-billion -- up from R8.2-billion in 2015, reveals the Savca 2017 Private Equity Industry Survey, released today. Tanya van Lill, CEO of the Southern African Venture Capital and Private Equity Association (Savca), said between 2015 and last year, trade sales were reported as the most popular exit route in value terms while sales to management were the most popular by volume. “The average proceeds per exit was R176.3-million in 2016, compared to R48.1-million in 2015. Realisations (returns to investors) in 2016 reflected a times money multiple of 2.0, an increase...

  • Drive Revenue gets multi-million rand funding injection from HAVAÍC

    Cape Town tech startup Drive Revenue has landed an undisclosed amount from HAVAÍC, the venture capital (VC) fund announced yesterday. HAVAÍC executive director Grant Rock said in a press release that the funding will be used to help Drive Revenue to roll out its cloud-enabled financial management system for legal practices. Speaking to Ventureburn, Rock said he could not disclose the amount in funding invested in Drive Revenue, saying only that it was "several million" rands and that it was made available from individual investors offshore. Rock said the idea is to help Drive Revenue to secure a round of equity investment later this year. 'We have resellers coming...

  • Grotech fund set to announce first three deals

    Grotech, a venture capital (VC) fund set up under the 12J VC tax incentive, is set to announce its first three investments, said fund manager Clive Butkow speaking to Ventureburn. Butkow (pictured above) said the three three deals are all in technology products developed by existing companies. These are: A tech app for a fast moving consumer goods company. A social-media influencer platform, which already has revenue of about R17-million and employs eight staff. The platform has a presence in the UK and looking to expand to other overseas markets. An existing business involved in booking activities in the travel sector. Butkow expected several jobs to be created...

  • SA SME Fund will commence with due diligence in July says CEO

    The R1.5-billion SA SME Fund will commence with initial fund screening due diligence from next month (July 2017), the fund's CEO Quinton Dicks said today. In April, Dicks told Ventureburn that he plans to finalise the recruitment of his initial five-member team by 1 June before making investments into approved funds. The fund will invest in funds which will then invest in high-growth small and medium-sized enterprises. In response to questions from Ventureburn on whether any funds had been disbursed, Dicks said the initial team members had all been appointed with the final appointment joining on 1 July 2017. "We have not committed to any funds...

  • Can 12J VC tax incentive create the jobs South Africa badly needs?

    Tim Strang wants to provide spaza shops and wholesalers with a better way to order stock, through an app. He's betting on creating hundreds of jobs for sales agents that deploy the app -- thanks to an investment under a venture capital (VC) tax incentive. His Durban-based company and app, Spazapp is one of a number of firms that venture capital companies (VCCs) have invested in under the incentive, which is administered by the SA Revenue Service (Sars) and falls under Section 12J of the Income Tax Act. It allows investors to get a tax rebate if they invest in a VCC that in...

  • Investors clamouring for 12J VC incentive following tax hike – fund managers

    The increase in the top marginal income tax rate to 45% for high earners is driving more South African investors to seek out the 12J venture capital (VC) incentive to offset their taxable income, say fund managers. Under the incentive, which is managed by the South African Revenue Service (Sars), investors that invest in venture capital companies (VCCs) that in turn invest in qualifying small enterprises, can write off the full investment made in any one year from their taxable income. In February in his Budget speech then Finance Minister Pravin Gordhan announced a new top tax rate of 45% for individuals earning...

  • Foreign investment injection could propel South Africa’s VC ecosystem, 12J funds

    Ask any tech startup and they’ll tell you that raising venture capital (VC) in South Africa is not easy, that said, it’s a lot easier than it was seven years ago. Back then it was next to impossible to get VC funding. The local VC ecosystem is in its 10th year of building and while by US or Israel standards we may still be in our infancy. Yet for an industry that has had to entirely bootstrap itself we’ve done very well, but we still have a long way to go. The US and Israel ecosystem developments were both significantly bolstered...

  • Unpacking South Africa’s tech startup and scaleup investor landscape

    Getting access to the right seed and growth finance is critical to the success of most emerging technology companies. But finding the right investor can be a daunting task for any founding team. You have to deal with different mandates, big egos, various terms and long lock-in periods just to start discussions and there are many boxes to tick. In working on over R300-million worth of seed and growth finance deals for our clients (see the infographic below), our team has seen it all. Without significant direction, founders can spend months worth of crucial time and energy in pursuit of an investor instead...

  • Venture capitalist questions why so few women involved in angel investing in SA

    Why are there so few women angel investors in South Africa? It's a question that continues to puzzle local venture capitalist Andrea Bohmert. “I would love to have the answer to that question, because I don’t have it,” said Bohmert, a partner in venture capital (VC) fund Knife Capital. Bohmert was speaking at a women in angel investing event hosted by the SA Business Angels Network (Saban) last night at FNB’s offices in Cape Town. She pointed out that just one of the 24 investors in Knife Ventures -- Knife Capital's VC company approved by the South African Revenue Service (Sars) in August last year --...

  • SA downgrade ‘nearly irrelevant’ to startups – Michael Jordaan

    South Africa’s downgrade to junk status earlier this month by two rating agencies may have depressed Michael Jordaan, one of the country's most respected venture capital (VC) investors, but he believes the downgrade is "nearly irrelevant" to startups. "In this tough economic climate it is useful that one of the advantages of startups as opposed to big business is that the macro economics are nearly irrelevant as it is far more important for the startup to first succeed in its narrowly defined micro-market," said Jordaan in an email to Ventureburn. However, in a wide-ranging interview, the former head of First National Bank, now the...

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