SA SME Fund, TIA commit R237.5m in new money to biotech, university, tech fund

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 and R152.5-million in a university technology fund.

This, while TIA has agreed to commit an additional R1.5-million in hardware technology incubator Savant‘s venture fund after the SA SME Fund announced in February that it had invested R110-million in the fund (see this story).

The 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).

The latest announcement follows a memorandum of understanding signed by SA SME Fund CEO Ketso Gordhan and TIA interim CEO Fuzlin Levy-Hassen (pictured above, left and right respectively) at the Innovation Summit in Cape Town on Friday (13 September).

The R1.4-billion SA SME Fund is capitalised presently by over 50 JSE-listed firms and the Public Investment Corporation (PIC), which manages government employees’ pension funds.

Only R237.5m of the nearly R350m to be invested in three funds by TIA and the SA SME Fund is new money

Of the R236-million invested in a biotech fund OneBio Seed Investment Fund and the University Technology Fund (UTF), TIA will contribute R11-million.

The SA SME Fund’s mandate to the three fund managers includes a requirement that they invest at least 50% of the fund in businesses owned by black entrepreneurs.

While the SA SME Fund and TIA announced in a statement earlier today that they would together invest about R350-million across three funds, a senior official at TIA who asked not to be quoted because she didn’t have the authority to do so, confirmed that R110-million had already been committed by the SA SME Fund in Savant.

The official said TIA’s total contribution in the nearly R350-million came to R12.5-million — but hastened to add that this didn’t mean that the agency is playing a small role in funding innovative firms.

The agency contributes millions of rands to such firms through its seed fund, its technology development fund and its youth technology innovation fund, the official pointed out, adding that the agency has invested “more than R500-million” in the biotech sector.

OneBio mulling five deals

OneBio co-founder Michael Fichardt told Ventureburn in a call today that his fund will provide investment capital to seed early-stage startups to prepare them for a Series-A funding round.

Fichardt 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.

The OneBio incubator was launched in Cape Town in April last year by the Cape Innovation and Technology Initiative (CiTi) after it signed a collaboration agreement with the Centre for Proteomic and Genomic Research (CPGR) (see this story).

So far the incubator has supported nine startups — six from South Africa and three from Zimbabwe. Fichardt said while the incubator ran a pitching day last month, the startups are still receiving support remotely.

He said none of the participants have clinched funding yet, despite there having been investors present at the pitching session.

The SA SME Fund anticipates receiving formal approval of the University Technology Fund following the 28 September when the fund’s board next sits.

Read more: Savant Venture Fund invests in security device startup Jonga [Updated]
Read more: SA hardware tech incubator Savant invests over R9m in medtech startup SmartBlade
Read more: Biotech incubator OneBio opens applications to SA, Zim startups
Read more: SA SME Fund commits R110m to hardware tech incubator Savant
Read more: CiTi, CPGR sign agreement to launch OneBio incubator in Cape Town

Featured image: SA SME Fund CEO Ketso Gordhan pictured the agreement with TIA interim CEO Fuzlin Levy-Hassen while representatives of the various funds and TIA look on. (Supplied)