Funding your startup: Ventureburn lists the SA investors delivering [2019 update]

For entrepreneurs wanting to find early-stage funding, this is the article for you. As there is generally a veil of secrecy surrounding funding and startups, there is often smoke and mirrors in the industry, with many claiming to be “investors”.  Ventureburn has sifted through the South African landscape and brought you the investors that are putting the money where their mouths are, and investing in the startup industry.

Make sure to keep checking back on this article. We will constantly be updating it with new funds as the startup space grows in South Africa. Also, with your comments and suggestions we hope to create a clear overview of the people and organisations that influence and shape South Africa’s tech venture space.

*If you feel there is someone we missed, then please email editor@memeburn.com so that the list can be updated.

4Di Capital

4Di is very well known in the startup industry, probably due to the fact that it was founded by its high-profile investor and entrepreneur Justin Stanford. Stanford was also the co-founder of the Silicon Cape Initiative. The group managed to raise R225-million in funding in 2016, as well as an undisclosed amount in 2014. These funds will be used to invest in early and growth-stage startups.

In 2017 some of the startups 4Di made investment in were SA drone company Aerobotics and Sensor Networks.

Read this 2017 interview in which Stanford talks on the increasing number of acquisitions of local startups by foreign investors.

Action Hero Ventures

Founded by Ernst Hertzog, Action Hero Ventures is a private investment holding company that specialises in early stage angel investments. The company looks to invest alongside other investors and invests an initial maximum of R3-million into startups.

Some of its more notable investments include Wumdrop, Picsa, and Domestly.

AngelHub Ventures

This VC is a seed and early-stage investor and looks at lean, disruptive startups. In 2015, the company invested in Snapplify, which also saw former rockstar executive banker, Michael Jordaan, join the startup’s board. They also hold shares in GoMetro, who’s recently had a 20% acquisition by Tritech Media.

Montegray, a holding company of Jordaan’s and established in September 2013, also does early-stage investments through AngelHub. Montegray targets businesses with at least two years’ trading history.

Clifftop Colony

Clifftop is one of the more “under the radar” VC companies that specialises in investments of R20m and above. However, despite this, the firm has been recently active in the world of early stage startups. This Muizenberg-based VC also has headquarters in the US, UK, and Switzerland. It aims to catalyse startup growth as well as provide advice on a strategic level.

Some of Clifftop Colony’s more notable investments include R8-million in Wyzetalk and R2.5-million in iono.fm.

Dazzle Angels

Dazzle Angels is the first female focused angels fund in South Africa. As of 2 October 2019 the fund was yet to announce any investments, but it has been mulling a number of potential investments (see this story for the latest).

Edge Growth

Edge Growth definitely fits the bill with its R388-million Vumela ESD Fund being managed on behalf of FNB. When investing, Edge Growth looks for “investment readiness” in startups.

One of the more prominent startups backed by the VC is SweepSouth, which received a funding round of R10-million from a variety of investors (including Vumela).

Goodwell Investments

Funding firm Goodwell Investments might be based in the Netherlands, but the firm has a respectable portfolio of African companies across various stages.

Its €50-million uMunthu fund is targeted at startups and high-growth companies in fintech spaces.

Some of these firms include WhereIsMyTransport and Nomanini.

HAVAIC

Havaic are new-comers to the VC and startup scene. Apart from investing in early stage, high-growth businesses, Havaic adopts a “hands-on” approach to the startups it invests in.

One of the VC’s largest investments to date happened only a few weeks ago. The VC firm’s 2017 investments include Digital Cabinet, Recomed and Drive Revenue.

Jozi Angels

It might not be a proper investment fund, but Jozi Angels serves a crucial role in the sector. Besides its focus on growing the startup system, Jozi Angels has also facilitated several deals, while also providing capital and coaching to early stage companies.

Jozi Angels’ partners include ABAN, Ground Flr, Venture Network, and SABAN.

Kalon Venture Partners

South African Section 12J venture capital (VC) company Grotech in 2017 rebranded as Kalon Venture Partners. The VC company is — together with Knife Capital — one of the few 12J funds that invests in tech startups. For a list of 12J funds click here.

In 2017 the VC company invested in SnapnSave, i-Pay and The Sun Exchange.

Kgatelopele

Another notable addition to the list is Kgatelopele, offering “early stage or startup capital” and targeting “mostly black under-developed businesses”.

In addition to early stage investments, the company also focuses on firms at an expansion stage.

Knife Capital & KNF Ventures

We still are trying to work out the exact difference between Knife and KNF, but it’s safe to say that they are both headed by respected VC professionals in Keet Van Zyl and Andrea Bohmert. One of the more high-profile VCs on the list, Knife Capital plays host to KNF Ventures, which is an early stage fund with a target of R100-million. Knife also has HBD Venture Capital and the Grindstone Accelerator as two startup-focused operations in its stable. KNF has managed to rope in high-profile people like former Springbok rugby player, Bob Skinstad and internet entrepreneurs who have exited their businesses.

In 2016, the 12 startups in its Grindstone accelerator programme boasted revenue of over R65-million.

In 2017 Knife Capital opened a London office, through which it invested in Swedish startup MOST in the same year.

Newtown Partners

One of the more interesting VCs, Newtown Partners was founded on the set of Dragons’ Den, and is headed up by Vinny Lingham and Llew Claasen.

Some of their investments include BitGo, SA Florist, WumDrop, and SweepSouth. SA Florist won its investment by pitching on Dragon’s Den, where Lingham was a Dragon.

The VC firm in 2017 began raising funding for startups using initial coin offerings (ICOs) to raise finance for three startups in that year: Augmentors, Lingham’s startup Civic and Wala. To read more about how to run an effective ICO, click here.

Niveus Ventures

Founded in 2016, Niveus Ventures is a subsidiary of Hosken Consolidated Investments (HCI:Johannesburg) and the youngest firm on this list.

It looks to bridge the gap between Angel investments under R1-million and capital that ranges between R100 – R200 million.

OneBio

A Cape Town based seed investment fund focused on biotech. In September 2019 the SA SME Fund and the Department of Science and Technology’s Technology Innovation Agency (TIA) have revealed that they will invest R236-million together in two news funds — R83.5-million in a new biotech fund

At the time OneBio co-founder Michael Fichardt told Ventureburn that his fund will provide investment capital to seed early-stage startups to prepare them for a Series-A funding round. He said OneBio is currently looking at five potential deals, some of which include startups that have previously received TIA seed grants.

He said OneBio is hoping to double the size of the current fund, which would bring it to just over R160-million.

Quona

Unlike many other VCs, which tend to look at tech startups in general, Quona invests specifically in companies utilising and creating fintech ideas in emerging markets.

In August 2016, Quona was part of the US$15-million investment round for Zoona, in which the VC doubled its initial investment.

SABAN (South African Business Angel Network)

The South African Business Angel Network (SABAN) is a group of several companies and initiatives, such as Silicon Cape and SiMODiSA. The aim of SABAN is to grow Angel investing in SA by providing support, training, and potentially linking them with startups to invest in.

SABAN is still in its infancy, though, having launched in August 2016.

SABF Seed Fund

The SABF Seed Fund isn’t new to the scene, having been launched by the SAB Foundation, in partnership with the Bertha Centre for Social Innovation and Entrepreneurship.

The fund aims to provide students and entrepreneurs from various institutions with access to much-needed seed capital. The fund also focuses on supporting ideas with test funding of up to R10 000 and seed funding of up to R50 000.

Savant Venture Fund

Savant is a Cape Town based hardware tech incubator. In February 2019 the incubator announced that the R1.4-billion SA SME Fund had committed R110-million to the tech incubator, with 50% of this amount earmarked for black African owned firms. 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 (see this story).

In September 2019, the Department of Science and Technology’s Technology Innovation Agency (TIA) agreed to commit an additional R1.5-million in Savant’s venture fund (see this story).

As of September 2019 Savant’s fund has so far invested in two startups — R9.5-million in Cape Town medtech startup SmartBlade and an undisclosed amount in security startup Jonga (see here and here).

Silvertree Internet Holdings

Founded by Manuel Koser and Peter Allerstorfer (both previously with Zando and Jumia), along with Paul Cook, this is a VC that primarily focuses on ecommerce and internet companies. Earlier this year, the company pledged $10-million to grow startups in SA.

To date, Silvertree has invested in the likes of Click n Compare, WineCo, We Are Monsters and PriceCheck, which was sold to Naspers and then shortly bought back again by its founder Kevin Tucker.

Team Africa Ventures

Founded and run by Daniel Guasco and Wayne Gosling, Team Africa Ventures focuses on “passionate founders to create sustainable and valuable technology driven businesses”.

One of their latest investments is in Gosling’s latest company, Hyperli.

Technology Innovation Agency

The Technology Innovation Agency (TIA) is a public entity which provides three types of funding (including seed funding) to entrepreneurs, among other bodies and individuals.

The seed fund, in particular, is meant to help small businesses advance their research and ideas, helping them grow toward a proof of concept and to develop working prototypes. Launched in 2013, the seed fund has two streams – one that channels seed funding through technology transfer centres at universities and science centres to innovative projects and another that works with a number of small business support organisations in provinces to disburse funding to entrepreneurs.

Read more about the seed fund here and here.

VC4Africa

The self-proclaimed “African platform for startup funding” is a community of professionals spanning over 150 countries and dedicated to building and funding sustainable SMEs. Entrepreneurs are able to look for investors in the under  $1-million investment category using the platform.

Other funds to look out for:

• There are a range of Section 12J venture capital (VC) company funds that invest in companies — including startups. The funds offer investors who invest in them, tax returns. The funds in turn invest in qualifying small companies (which are not exclusively tech firms or startups). There has been a significant demand from investors (see this story) For a list of registered 12J funds click here. For more about the performance of 12J funds read this story, this one and this one.
• Business Partners Venture Fund – having put aside R1-billion for startups in 2013, and launching a R300-million green fund in 2015, it looks for startups with new products and concepts, and those with substantial job creation. View this 2017 story here.
• CCDI Capital – this fund put aside R6.5-million for pre-revenue and innovative technologies in the agri-processing, health and bio-tech, and manufacturing sectors.
• Grovest – offering tax incentives to investors, at the end of 2015 this VC launched a R100-million fund for disruptive startups in SA, and acquired a stake in Seed Engine in 2016.
• The Industrial Development Corporation (IDC) invests in technology startups with equity and debt finance through its New Industries unit. Read this 2017 story.
• Polymorph – besides investing up to R2-million of its own cash, this VC (or “Venture Technology” as they call themselves) also invests time and knowledge into ventures.
• Alphawave is a Stellenbosch technology group that invests in software and electronic skills. As of 2017 it had invested in five companies.(read this Ventureburn story here).

*If you feel there is someone we missed, then please email editor@memeburn.com so that the list can be updated.

Feature image: Christopher Griner via Flickr.

Updated 14 October 2019 by Ventureburn editor Stephen Timm.