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Renowned South African venture capital (VC) firm Knife Capital has launched a new investment fund called KNF Ventures. With a rather generous target of R100-million, the fund will invest in innovation-driven startups by providing tax incentives and high returns.
The announcement also adds to an increase in confidence for South Africa’s startups. Earlier this month, local ecommerce company Travelstart secured US$40-million from UK investors, while VC firm Silvertree Internet Holdings committed US$10-million investment to South African and African startups.
“By leveraging knowledge, networks and funding, KNF Ventures will accelerate the growth of strategically relevant South African scale-up companies and generate enhanced returns for investors,” says Keet van Zyl, CEO of KNF and co-founder of Knife Capital.
KNF is a section 12J-approved company which means that investors can deduct the full amount of their investment from taxable income.
KNF has also partnered with former Springbok Rugby Captain and entrepreneur Bob Skinstad to help drive capacity building interactions and regular networking events.
“I’ve always treasured my personal and business relationships and believe in the power of like-minded individuals working together to achieve a common goal,” says Skinstad in a recent press release sent to Ventureburn.
“Through the KNF network we believe that the solution to virtually every challenge confronting a South African high-growth business is no more than three phone calls away,” he adds.
KNF will find, make, grow and realise scalable investments while aiming for a minimum of 40% annualised return on investments. The minimum participation per investor is R1-million.
Van Zyl adds that South Africa needs to enable more entrepreneurship:
I believe that while #ManyThingsMustFall, #EntrepreneurshipMustRise in South Africa to solve issues like job creation and economic growth. Entities like KNF ventures essentially provide ‘mentorship capital’ because of the vested interest in the success of the underlying investment portfolio. While there is more funding available than before, South Africa still has a massive gap when it comes to risk capital for SMEs.
The launch of KNF comes a month after Knife Capital boasted that the 12 accelerated companies collectively grew revenue by R65-million. It also follows the acquisition of radar startup iKubu by Garmin in early 2015.