Sanari Capital announces first close for its new fund at R475m

Private equity firm Sanari Capital has announced a first close of R475 million (about $28 million) on its Sanari 3S Growth Fund known as Sanari 3SG. The firm focuses on investments in growth companies emanating from Africa with regional and global scalability and exposure.

Sanari chief executive Samantha Pokroy believes the milestone recognises Sanari’s purpose-led approach, built on experience and its particular brand of “inventive, disciplined investing” that attracted significant commercial capital to the fund.

“We appreciate our investors’ conviction and support for our approach to growth-stage private equity. We are excited to see pension funds stepping up to support the real economy and growth companies to achieve combined social and financial returns.”

At its first close, Sanari 3SG has received commitments from leading institutional investors, including the 27Four Black Business Growth Fund, RisCura (on behalf of various clients), and the National Fund for Municipal Workers, with good visibility of achieving its final close target of between R1.2 billion and R1.7 billion (about $100 million) in commitments.

Rory Ord, head of private markets at 27four, says, “We are excited to back Sanari. The team’s focus on addressing social and economic challenges through growth investments is closely aligned with our objectives of generating strong returns for our investors and broader social impact within South Africa. We believe we have supported the right partner to achieve this.”

According to a media release, Sanari 3SG will invest in established and growing companies in industries that benefit from its thematic focus areas and capitalise on its specialisation of investing in founder-run, owner-managed and family-owned businesses.

Named for Sanari’s proprietary framework for building businesses that are sustainable, scalable and saleable (3S), the fund is the manager’s second but the first targeting institutional investors.

Officially launching now, the fund has already deployed over 30% of its first close committed capital, with two investments warehoused before closing and a third investment in a fintech services provider to be announced shortly.

Edulife Group is the largest independent school group in South Africa’s Free State province, now embarking on a national expansion. Sanari describes Edulife as an example of an African solution for one of the continent’s most significant challenges: bringing accessible, affordable, relevant education to students across income levels on a sustainable and profitable basis, combining exciting growth prospects with rewarding impact.

Furthermore, award-winning LightWare LiDAR is a South African developer and manufacturer of micro LiDAR systems (remote sensing technology) for drones, robots, autonomous vehicles, IoT, and smart cities on a global platform with a halo client base.

Sanari partner and director Moushmi Patel says, “Sanari brings a unique experience set focused on unlocking digital and human potential for successful investment in today’s local and global context. The fund invests between R50 million and R200 million (about $3million and $12 million) in medium-sized and mid-market businesses, in either a single tranche or a series of capital investments, signalling our emphasis on supporting companies as they grow.”

Sanari also has a significant pipeline of investment opportunities in healthcare, agri-business, education, services, food and technology.

Sihle Gumede, principal and director at Sanari, adds: “We see substantial opportunity through our investment themes to back the businesses that counter economic headwinds. Our investees provide solutions for a more connected and digital world, with investments in technology, IoT, data and services. In addition, as the world becomes more socially conscious, we’re ready to meet the growing demand for education, healthcare, food security and green solutions.

Sanari Capital is majority women- and black-led and owned. The capital invested by the fund qualifies as 100% black ownership in underlying portfolio companies. Importantly, the fund also meets the criteria for the 2X Challenge, which calls on DFIs and private sector investors to mobilise capital to support women’s participation in economic development and leadership on a global platform.

Doing good whilst doing well, the fund delivers positive social and environmental impacts aligned with UN Sustainable Development Goals and drives the highest standards of ESG.

Ofentse Pelle, principal and director at Sanari, concludes: “We invest in companies that share our commitment to creating meaningful employment, contributing to inclusive economic growth without harming the environment and communities in the process. We live our values daily, and our diverse team offers a competitive advantage in a changing world where we must be relevant to win.”

Bowmans served as legal adviser for the fund.

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