$10m to be invested for African start-ups
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JOHANNESBURG – Kingson Capital general partner Ross Jenvey says the venture capital firm is thrilled that US President Donald Trump’s administration has guaranteed $10 million (R144m) towards start-ups to help give them an advantage in scaling the proverbial growth ladder.
The guarantee commitment from the US Department of the Treasury, made through the USAID, will go towards assisting the company’s new R400 million Fund Two to raise funds to be invested primarily in fintech, Internet of Things, insuretech, among other early stage startups.
The investments were aimed at denting the scourge of unemployment in the country and to help sustain one of Africa’s most industrialised and developed economies.
The agreement between Kingson Capital and USAID was signed during a ceremony held at the Durban International Convention Centre on April 2, where President Cyril Ramaphosa’s investment envoy and former Standard Bank chief executive, Jacko Maree, delivered the keynote address.
Jessye Lapenn, Chargé d'Affaires at the U.S. Mission in South Africa, who was among the guests present at the signing ceremony in Durban, says the guarantee will grow South African businesses, create jobs and improve the livelihoods of South African communities.
“This partnership is intended to attract investors to the Kingson High-Growth Tech and Black-Owned SME Fund and to enhance Kingson’s capacity to provide financing for black-owned SMEs and technology enabled start-ups in South Africa,” says Lapenn.
For Jenvey, a married father of three, the $10m guarantee is a safety net that will help to give credence and confidence to investors that money invested in Fund Two is subject to good risk mitigating features is in safe hands.
“It will also help to attract investment money into early stage companies, in which case studies show that a good SME sector in any country helps to create jobs,” says Jenvey, who is largely responsible for overseeing the current investments in Fund One.
“We are very excited that an organisation such as USAID, has decided to back a company like Kingson Capital. We are thrilled about that. It was a very rigorous process we had to go through to meet their requirements.”
Jenvey, who describes himself as tenacious and fiercely loyal, says he is working closely with Kingson Capital founder and general partner Gavin Reardon in shaping the future of the venture capital firm founded in 2015.
“I see Kingson as a vital part of the venture capital and SME ecosystem in South Africa,” he says.
“I aim to see it strongly grow its funds under management, while adding integrity and professionalism to the SA venture capital industry.”
The former equity analyst says when he left the corporate sector he ran a business for two years and admits: “It gave me insight into how hard it is to be a business owner.”
“Venture Capital helps me to marry my investment skills with my on-the-ground experience,” says Jenvey, whose core skills include analysing figures, forecasting, valuations, troubleshooting business models and strategies.
“These skills help Kingson when we are investing in new companies, and in assessing new strategies within existing investments.”
Jenvey, who says watching a Rugby World Cup final live is number one on his dream bucket list, reveals that they are in “late stage discussions” with mostly listed South African companies to invest in Fund Two.
“We also got some interest from international investors as well who are willing to put in money into the fund. The fundraising is going well. In fact, through the rest of the year we will be fundraising.”
The venture capitalist says they are also looking at new places to raise money and that hopefully by year end the fund would be closed.
“We want to help grow SMEs and make a difference in this country,” says Jenvey, adding that his children are too young to understand what he does for a living.
“They sometimes wonder why I have to travel so much … (but) my wife is hugely supportive, even when I am working really long hours or travelling a lot.”