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Endeavor Harvest Fund II closes as most active VC in SA
Endeavor South Africa has raised double its initial target for Harvest Fund II with R190 million raised in the fund’s final close. The fund has invested in 10 companies since its first close in 2021 with headline grabbing participation in Clickatell and Flexclub rounds the obvious highlights.
Endeavor Harvest Fund II invested in 10 companies in its first year, making it the most active VC fund in South Africa
Harvest Fund II is a founder-aligned, rules-based, co-investing fund, into a vetted pipeline of medium-sized, high-growth SA founded Endeavor Entrepreneurs which are enrolled in its global program. The co-investment and rules-based nature of Fund II, makes it an extremely efficient fund and the first-of-its-kind in Africa.
“What also differentiates our Fund is the spectrum of stages it invests in which range from pre-Series A to Series D, mimicking the companies Endeavor works with in its portfolio of high-growth entrepreneurs,” explains Antonia Bothner, Harvest Fundraising lead.
Fund II follows the terms of the lead investor, enabling Endeavor to actively assist entrepreneurs to raise capital through access to Endeavor’s investor network and supporting them negotiate terms with the lead investor, before Fund II joins the round.
This strategy enables Fund II to rapidly deploy capital into its network of Endeavor Entrepreneurs and stay aligned with the founder.
“When we were designing Fund II, we wanted to stay aligned with Endeavor’s overall mission, but also carve out a business model that would create a sustainable revenue stream to support the work Endeavor South Africa does,” explains Bothner.
A unique growth approach that Endeavor has rolled out in 40 countries reinvests 20 percent of Fund II’s carry back into Endeavor South Africa’s non-profit activities. This will contribute to South Africa’s economic growth by fueling a positive cycle of support for the next generation of entrepreneurs.
“It is an important milestone for Endeavor South Africa, who together with the support of our board, partners, mentors and entrepreneurs, is the first country office to launch a local fund that complements our Global Endeavor Catalyst funds,” says Herman Bosman Endeavor South Africa Chairman.
“Capital remains an essential enabler for our local high-growth entrepreneurial ecosystem. This is a first for Africa and for Endeavor and something we are proud of.”
Harvest Fund II expects to be fully invested by the end of 2022, with deals to continue at a similar pace.
“The growth sector in Southern Africa is still nascent and the opportunities are still plentiful and growing. The beauty of the way our Harvest Fund II is structured and positioned is that there is ample room for both growth and impact,” says Bothner.
The rich investment landscape comes as no surprise, as Partech Africa recorded that in 2021, 640 African tech start-ups raised a total of $5.2 billion across 681 equity rounds, meaning a 3.6x year-on-year growth and making the African tech venture capital the world’s fastest-growing ecosystem globally.
“Given this, we are looking forward to the multitude of returns both the existing fund and Harvest Fund III will bring to our local entrepreneurial ecosystem – entrepreneurs and VCs – and most importantly the broader South African economy.”