SA SME Fund and TIA announce R350m innovation investment in 3 VC Funds
DURBAN – The SA SME Fund and the government’s Technology Innovation Agency (TIA) has announced a public-private partnership to co-invest R350 million across three venture capital funds.
OneBio Seed Investment Fund, a biotechnology dedicated fund; Savant Venture Fund, a hardware technology incubator and Fund Manager (in which two deals have already been pre-funded by TIA’s Seed Fund); and the newly established University Technology Fund (UTF).
These fund managers will invest in a portfolio of early stage businesses and provide capital, as well as other support, to the entrepreneurs, to help them commercialise technologies and grow their businesses. The SA SME Fund’s mandate to the three fund managers includes a requirement that they invest at least 50 percent of the fund into businesses owned by black entrepreneurs.
The parties signed a Memorandum of Understanding (MOU) at the Innovation Summit in Cape Town on Friday 13 September, 2019.
Ketso Gordhan, Chief Executive of the SA SME Fund, said, "We are hugely excited and energised by this partnership to support and invest in innovation, especially in black-owned start-ups and scale-ups in this space. This forms part of our commitment to support government, together with TIA, in stimulating and intensifying technological innovation to improve economic growth, create jobs and impact on the quality of life of all South Africans".
Fuzlin Levy-Hassen, Interim Chief Executive of the TIA, said, "This new investment partnership is the result of the synergies and commitment that exist between Government and the private sector. We are aligned in our vision of turning bright young minds into viable and sustainable business founders whose successes will create jobs and drive economic growth. The sophistication and creativity already evident in these businesses should make us proud as a country, and encourage us to further support innovation".
The current value of the fund commitments are as follows:
R83.5 million to the OneBio Seed Investment Fund, R111.5 million to Savant Venture Fund and an anticipated commitment of R152.5m million into the University Technology Fund (UTF) (for which the SA SME Fund anticipates receiving formal approval by the end of September).
The SA SME Fund and TIA also signed the legal agreements for the OneBio Seed Investment Fund, officially launching the only biotech dedicated investment fund in South Africa.
The SA SME has invested in these three VC funds because it is trying to support innovation and the creation of entrepreneurs in South Africa, but also by being catalytic in supporting underdeveloped sectors:
- OneBio is a fund that focuses on biotechnology, which historically has been the purview of Big Pharma, but technology and declining costs in the research and development mean that our engineers can develop great solutions using local resources for global needs.
- Savant a first time Fund Manager focused on hardware technology Fund. This Fund is plugging the shortage of investment into hardware technology within the South African VC environment. The team has over a decade of experience in commercialising hardware tech.
- The UTF is a University Technology Fund that aims to leverage and commercialise the IP originating from SA universities, where the focus has typically been at very early stage research with no follow-on capital.