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Amid increased calls by the private and public sectors for greater support of South Africa’s growing pool of entrepreneurial talent, local VC company, 4Di Capital, announced that E. Oppenheimer & Son has joined 4Di Capital Fund 1 as the fund’s newest investor.
E. Oppenheimer & Son International is the investment holding company of the Oppenheimer Family interests, founders of the global mining company Anglo American, and managing shareholders of De Beers, the world’s leading diamond company, until its recent acquisition by Anglo American.
4Di Capital has made seven investments in South African ventures so far, and recently announced its first profitable exit of mobile community startup Motribe Networks to MXit, the largest social network in Africa [read more about the Motribe deal]. The addition of the Oppenheimer family investment will double the size of the Fund, enabling 4Di to expand into further new investments while also having more capital available to accelerate the growth of its current portfolio.
Rachel Slack, a Director of E. Oppenheimer & Son, said, “We believe that South Africa has exceptional entrepreneurial talent and are excited to join the 4Di Capital family, where we hope we can assist in leveraging the resources available to us in support of young, high-impact entrepreneurs wishing to develop and launch their new innovations onto the global stage.”
4Di Capital focuses on investing in early-stage technology ventures with global potential. This new addition to the company’s investor base brings together the extensive global networks of the Oppenheimer family with those of the current 4Di investors – including Reinet Fund S.C.A.,F.I.S. – and the venture investing and operating experience of 4Di.
Justin Stanford, Founding Partner of 4Di Capital and co-founder of the Silicon Cape Initiative, said, “4Di Capital is well positioned to take full advantage of South Africa’s potential as a global technology innovation hub.”
He continued, “We are very pleased to have the Oppenheimer family on board to assist us in capitalising on the growing number of exciting new technology opportunities that need startup capital and support to penetrate the global market.”
The Oppenheimer family’s decision to invest in the South African technology industry is notable. Speaking to Stanford, we got the sense that the deal signifies the family’s desire to support and help drive young local entrepreneurial talent in South Africa and in fact, Africa. The World Bank noted that despite the global crunch, the African continent continues to draw positive growth outlooks thanks in large part to its oil and mining industries. The investment in 4Di could be seen as a way for the Oppenheimers to give back to the continent on which it founded its empire.
Seed capital access in South Africa is a particularly challenging obstacle for startups. “It is not easy to find investors with a mandate and appetite for early-stage VC in SA. Globally the fund raising environment for VC is very challenging right now, and being an SA firm makes it even more challenging, so we are fortunate to locate investors for whom what we do is a fit. Despite the challenges, unique themes are still capable of drawing funding — thus with our unique team and positioning we have been successful,” says Stanford.
The deal underlines the belief that because of Africa’s untapped potential and unprecedented mobile penetration, it will increasingly draw attention from international tech investors.
4Di has positioned itself to capitalise on the trend towards micro venture capital or seed accelerators, involving smaller investments and a quicker turn around to exit.
Laurence (Laurie) Olivier, US based Senior Partner of 4Di Capital commented, “Recent shifts in technology and the global venture capital arena have created opportunities for entrepreneurs in emerging markets to take advantage of an increasingly integrated global technology landscape and lower cost of market entry, especially in the software, mobile and internet sectors. Barriers to entry have dropped significantly and now technological talent anywhere in the world has the potential to flourish if provided with the right enabling environment, capital and support.”