Sonic Ventures launches R1.5-billion fund to back high-growth tech companies

Sonic Ventures, a Cape Town based investment company that plans to target early-stage tech companies, yesterday (19 October) launched a R1.5-billion fund that plans to back high-growth tech ventures — largely in SA, US and UK.

Speaking during a presentation yesterday at the Pepperclub Hotel and Spa in Cape Town, Sonic Ventures’ US-born CEO Joseph Gough (pictured above) said the firm plans to list 35-million shares at R45-per share on SA online shareholder administration platform Equity Express Securities Exchange (EESE). The expected listing date is 29 November.

Sonic Ventures’ R1.5-billion fund will target an internal rate of return (IRR) of more than 25%

Gough said he had been working on the company’s model and on the fund for the past five years. He stated that although Sonic Ventures has yet to raise any capital, the fund had received a number of commitments thus far.

The firm will rely on a pipeline of opportunities from existing tech hub relationships in the US, South Africa and the British Isles, in addition to affiliations via board members.

Sonic Ventures’ proposed investments, which Gough outlined, include:

• R112.5-million for between 10% and 25% equity in US patient engagement platform Wellopp
• R150-million in return for 10% equity in US Basalt Fiber reinforced polymer rebar (BFRP) manufacturer Neuvokas Corporation
• R30-million for 51% equity in blockchain security solution Securechain
• R186-million for between 25% and 30% in Australia-based eSports tournament company Emerge Gaming
  
• R45-million for 40% equity in Cape Town based online real-estate startup Property Fox
• R75-million for a 51% stake in Johannesburg-based customer analytics solution Syenap
• R75-million for 20% equity in US-based Digital Circus Media

Gough added that the firm will also look to invest in US-based companies LyteBeam Home, SilverVue, UK’s M2FX and SA-based Stackracket.

The fund, he said, will target an internal rate of return (IRR) of more than 25% and Sonic Ventures plans to ensure that investments have what it calls a “transformational effect” on SA’s entrepreneurship community. The fund will be audited by Deloitte with Nedbank and TGR Attorneys also working on it.

Sonic Ventures’ board, Gough claimed, has a track record of over 100 years experience.

Board members include chairman George Sebulela, vice chairman Bud Albers, non-executive director James Weber, director Justin Le Roux, non-executive director Mike Richards and director Greg Stevens.

Gough said he had been encouraged to set up the fund in South Africa by Sebvest Group chairman and president George Sebulela.

“I told George that we can raise this fund in several places globally. And he to his credit said, we want to give South Africa the first bite of the apple, you need to come (out here) to give the pitch. This is the place where the seeds need to be planted first,” he said.

Sonic Ventures co-founder Ashley James told Ventureburn on Monday (15 October) that the Johannesburg-based Sebvest Group, which Sebulela heads, had acquired a “large equity stake” in Sonic Ventures.

Featured image: Sonic Ventures CEO Joseph Gough conducting a presentation yesterday (18 October) at the Pepperclub Hotel and Spa in Cape Town