It is no doubt that the South African startup ecosystem is one of the most active and developed in Africa.
Compared to other African markets, the country has access to local funds and ties to a growing number of international investors. However, when compared to global players, the country’s startup space is far from achieving its full potential.
The country is already taking up the challenge by nurturing its startups as President Cyril Ramaphosa in March 29th launched ZAR 1.4 Bn fund that will be invested in small- and medium enterprises (SMEs) and startups.
The fund was set up to “address some of the most pressing challenges to the country’s economic growth” especially the SME sector.
In a move to further grow SA’s startup ecosystem, the government through the Department of Science and Technology plans to establish a ZAR 5 Bn fund for innovative start-up companies.
Blade Nzimande, the Minister of Higher Education, Science and Technology, revealed this recently stating that the fund seeks to help innovators commercialise their products.
“I am pleased to report that progress has been made towards establishing a fund that will help bring locally-developed innovations into the market,” Nzimande said.
“The fund is designed to largely de-risk the early stages of technology commercialisation and business development. An injection of R1 billion per year for five years is expected to make a significant impact in making these businesses more attractive to investors for significant scale-up.”
The fund is expected to be launched on 1 April 2020. Phil Mjwara, the department’s director-general said the fund is being launched for the sole purpose of helping startups upscale and attract investments.
He further revealed that the department is contemplating on introducing an insurance programme to sustain SMME enterprises.
Feature image courtesy: Siyabulela Duda @The South African