Half of R130m 4Di Capital, SA SME Fund to go to startups with black founders

Cape Town based venture capital (VC) fund 4Di Capital and the SA SME Fund have launched a R130-million fund that aims to invest in at least 10 tech startups. Half of the R130-million will be targeted at startups with at least one black founder.

The over R1.4-billion SA SME Fund is capitalised presently by 54 JSE-listed firms and R500-million from the Public Investment Corporation (PIC). The fund was launched under the CEO Initiative. 4Di Capital is one of eight funds that the SA SME Fund has invested in (see this story).

4Di Capital partner Justin Stanford (pictured above) told Ventureburn in an email today that R125-million of 4Di Capital Fund III’s first close of R130-million was from SA SME Fund, the rest has been committed by the VC.

“We will be looking at options in terms of raising additional capital for the fund but for now there are no fixed plans yet — in principle though the fund is still open to new investment,” said Stanford.

4Di Capital’s new R130m fund is backed by R125m from the SA SME Fund

Stanford said the fund will follow the VC’s usual modus operandi, which is to target tech startups in the early and growth stages.

The fund is vertical agnostic but the VC will look at deals for example in insurtech, fintech, edtech and agritech, he said, adding that the VC will look at a spread of both early and growth stage.

“It is designed to work together with our Exponential Fund as well, so will also co-invest in certain deals that match the mandates on both sides,” he added.

He added that the fund will invest in at least 10 companies and pointed out that the first few deals are already under consideration.

A portion of the SA SME Fund capital has been earmarked for companies that have founder teams which include black founders.

When asked how much exactly would go to startups with black founders, Stanford said while it is “difficult to predict” the exact amount that will be invested in the end, the VC fund will aim to invest “roughly half” of the R130-million in such firms.

4Di Capital partner Anton van Vlaanderen told Ventureburn in a call that the VC is currently considering between five to 10 deals for possible investment and that half of these were startups that had black founders.

Read more: Here are the eight funds that the SA SME Fund will invest in
Read more: Spartan SME Finance secures R100m from SA SME Fund for R600m fund
Read more: SA SME Fund commits R110m to hardware tech incubator Savant
Read more:It’s official: Cape Town healthtech startup is SA SME Fund’s first investment
Read moreSA SME Fund in new mandate to invest over R1bn in black small firms, startups
Read more: Former PPC Cement head announced as new SA SME Fund CEO [Updated]
Read more: SA SME Fund CEO’s stepping down was ‘amicable’ says fund official
Read more: Over a year on, when will big companies’ SA SME Fund get going? [Opinion]
Read more: SA SME Fund will commence with due diligence in July says CEO
Read more: SA SME Fund is not aimed at venture capital sector, says CEO
Read more: Exclusive: ‘Government won’t match private sector in R1.5bn SME fund’

Featured image: 4Di Capital partner Justin Stanford (Supplied)



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