Fund puts the ‘prof’ in profitable
One of SA’s largest venture capital funds, the SA SME Fund, is about to launch the first fund in Africa that commercialises ideas from tertiary institutions and gives access to funding and skills to transform groundbreaking ideas into viable businesses.
The University Technology Fund will be launched later in 2019.
“It’s like biotech, except it’s for commercialising all intellectual property coming out of universities.
“We’re doing it mainly at the moment with financial partnerships with the University of Cape Town and Stellenbosch,” said SA SME Fund CEO Ketso Gordhan.
In a coup for the fund, Tom Hockaday, who for 10 years was MD of Oxford University Innovation, will be the local fund’s adviser, chairing the investment committee.
Sibusiso Sibisi, who ran the Council for Scientific and Industrial Research for 14 years, will also join the fund's investment committee.
Gordhan has been at the helm of the SA SME Fund, a joint initiative between the Public Investment Corporation (PIC) and 50 large corporations, since August 2018.
Commitment of funds was slow to get off the ground, but gained momentum once Gordhan took over.
And though it's too early to determine the success of the fund, which started in 2016, September it topped R1bn in commitments.
The last of the 13 funds in which it’s invested, will be announced by December 2019.
The SA SME Fund was born out of the CEO Initiative, a group of CEOs who worked with public enterprises minister Pravin Gordhan in early 2016, shortly after Nenegate, to stave off a ratings downgrade.
Led by Discovery founder Adrian Gore and Bidvest founder Brian Joffe, the businesses involved in the fund contributed R900m, and the PIC, together with the Compensation Commission and the Unemployment Insurance Fund, contributed R500m, yielding a fund of R1.4bn.
Some of its investments are:
• SummerPlace Equity Partners, a female-owned private equity company, which has among other investments bought a stake in Cool (kids’) Cabbies;
• Savant Capital, a venture capital fund that invests in hardware tech businesses;
• Jonga, which is part of Savant Capital, developed a security device designed for informal and affordable housing units;
• Spartan, a debt provider to small to medium-sized businesses;
• Venture capital firm 4Di, an early-stage venture capital fund that invests in technology businesses;
• One-Bio, a biotech fund; • Masisizane, a small franchise fund focused exclusively on funding black entrepreneurs to buy petrol stations; and
• A2Pay, which lends money to spaza shops.
Access to funding can transform ideas into viable firms