Funding for startups and new ventures in South Africa

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Finding funding in South Africa for startups and new business ventures is no easy feat. In fact, it must be one of the most difficult tasks faced by any entrepreneur here.

Seed and venture capital is inherently very risky, meaning that it will always be relatively scarce.

Below is a short list of some South African finance providers that I’ve come across. I have not included many traditional venture capital firms here, but there should be several near you that you can contact in this regard [see the end of this article for a link to a longer list].

Venture capital and seed capital

• Business Partners – debt and equity investments in SME’s.
• Business Partners/Khula startup fund – funding for young black-owned businesses.
• HBD Venture Capital – invest in early stage SA companies with high growth potential [technology focus], minimum of R10 million funding requirement.
• Industrial Development Corporation [IDC] Venture Capital – invest in companies in seed or startup phase of developement [technology focus].
• Innovation Fund – focus on young businesses with patentable technology, have a seed fund which considers businesses that traditionally do not meet venture capital requirements but are important from a socio-economic standpoint.
• InVenFin – this is an early stage venture capital fund, focusing on businesses with protectable intellectual property. They claim that no investment is too small, and if it is too big they may refer it to big brother VenFin.
• Khula – offer Enablis-Khula loan fund offer guarantee for loan through FNB Enterprise Solutions from R100,000 to R2.5 million.
• National Empowerment Fund – provides entrepreneurship finance to young BEE businesses.
• Quickberry – based in CT, focus on new projects and startups requiring over R1 million.
• Raizcorp – via their business “prosperator”, provide “soft finance” [absorb expenses to ease cash flow] for startups and developing businesses. Also offer business support services.
• Support Programme for Industrial Innovation [SPII] – offer various schemes providing finance for qualifying businesses.
• Umsobomvu Youth Fund – invest in viable businesses with BEE representation [youth and women], investments from R100,000 to R5 million.
• Venture Capital Online – focus on technology, communication and life sciences sectors.

Networks matching investors and entrepreneurs

• Angel Moola – African online social lending exchange to match lenders and borrowers.
• Blue Catalyst – an initiative from Gauteng’s Blue IQ that attempts to match entrepreneurs and their business ideas with potential investors.
• Kiva – kive.org is a global success story that has made online matching of lenders and borrowers a reality. Although it doesn’t provide specific financing for South African ventures, it is a leader in the online matching sphere and is worthwhile having a look at – you never know, it may stimulate creative funding solutions in your own business.

Non-profit organisations

• The Funding Site – lists resources for non-profit organisations
  

This article is not intended to provide a comprehensive listing, but I hope it will give an idea of what is available and nudge you in the right direction if you’re looking for specific funding.

If there are others that should be included here, or you have stories about your experiences with these funders, please feel free to leave a comment below.

The SAVCA list of members provides contact details and some other potential funders for those interested, and those looking for consultants can have a look at the SAVCA associate members listing.

Thanks to Rene Truter for sending through Quickberry and VCOnline which I’ve now added to the list above.

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