Standard Bank and the SA SME Fund have backed venture capital firm Knife Capital’s new USD 50 M African Series B expansion fund, Knife Fund III. The Fund’s aim is to invest in the expansion of African innovation-driven companies and fill a critical follow-on funding gap.
The lack of support of local institutional investors for the venture capital alternative investment asset class is a huge stumbling block for high-impact entrepreneurship in Southern Africa. Speaking on the announcement, Akash Maharaj, Executive, Equity Finance and Investments at Standard Bank Corporate and Investment Banking, said: “Standard Bank believes in the positive impact that investment into early-stage high-growth businesses can have on innovation, job creation and economic development of South Africa. We have partnered with a number of the leading investors in this space and are excited to add Knife Capital to our venture capital portfolio. With Standard Bank’s expansive African footprint, our suite of bespoke banking products and extensive client base, we can facilitate the growth journey of businesses that scale internationally.”
Standard Bank has already invested in Hlayisani Capital and is finalising investment into a few other Funds that have a transformative impact through investments in technology and innovation to achieve a better and more sustainable future for all.
The second close of Knife Fund III brings provisional commitments to just over USD 40 M, and Knife Capital is finalising a few remaining funders’ due diligence and legal process to close out on the target raise. Other funders already committed include the IFC, Mineworkers Investment Company, the SA SME Fund, international development funders and prominent family offices.
The focus will be on scalable business-to-business (B2B) technology companies that have attractive exit optionality. The Fund is well positioned to directly invest behind the aggressive expansion of South African breakout companies and co-invest with other credible funders in companies across the rest of Africa. It has already made its first investment by leading the USD 10 M round in DataProphet – a business that provides AI-as-a-service software in the manufacturing sector.