South African venture capital firm Knife Capital announced today, that it is launching its fourth Grindstone Accelerator programme in partnership with African SME market access specialist Thinkroom. Grindstone focusses on South African technology entrepreneurs by shaping-up their companies to become more investable, sustainable and exit-ready.
The year-long Grindstone programme takes ten businesses with proven traction through an intensive review of their strategies and invests through Knife Capital’s SARS Section 12J Venture Capital Company: KNF Ventures; once all the checks are cleared.
Earlier this year, SME market access specialist Thinkroom Consulting acquired a 50% stake in Grindstone to bring elements of the programme to corporate innovation initiatives and to expand it into Africa.
“We’ve worked with many African startup initiatives through the years and while some add significant value on the funding readiness side, Grindstone stands out as it forces participants to consider themselves as an acquisition target, whilst building and preparing them to be exit-ready. We are delighted to be launching the fourth Grindstone programme with Knife Capital,” says Catherine Young, Thinkroom Founder & CEO.
Some of the previous startups passing through Grindstone accelerators have experienced measurable results. Knife Capital invested in ticketing solutions provider Quicket; tax wizard TaxTim received strategic investment form MMI, Transport data company WhereIsMyTransport raised multiple funding rounds from a group of local and international investors, and computer vision & radar startup iKubu exited to Garmin.
“Grindstone is about measurable growth, about building a foundation that can handle both challenges and opportunities. It is about being prepared, as interesting things happen to companies that are ready and able to act on short notice”, says Andrea Bӧhmert, Partner at Knife Capital.
Knife Capital boasts a significant track record of adding value to high-growth South African technology-enabled companies for exit. These include Fundamo that was sold to Visa for $110m; CSense that was acquired by General Electric and the recent exit of orderTalk to Uber Eats. “We created Grindstone by effectively compressing our venture capital engagement model of aggressively growing a company for three to five years into an intense one-year programme,” says Keet van Zyl, Knife Capital Co-Founder.
Small businesses have been touted as the key drivers of economic growth, job creation, and innovation. Programs like this could be beneficial in driving growth in South Africa, as the nation hosts a vibrant startup ecosystem. Coincidentally, the first half of the year has seen a significant rise in the number of Incubators and Accelerator launch across Africa and could possibly be an indicator of the increased need for deal flow for the startup ecosystem. The role of Incubators and Accelerators cannot be ignored as they work towards creating a fertile ground for Venture Capitalists to investment and exit.
More information on the Grindstone Accelerator Programme can be found here.