Knife Capital Reaches Final Close For Its USD 50 M African Series B Expansion Fund

By  |  August 10, 2023

Knife Capital reached the final close for its USD 50 M African Series B expansion fund, Knife Fund III. The Fund supports the expansion of African innovation-driven companies to fill a critical follow-on funding gap, as lead investor and through co-investment with other credible funders across the continent. The focus is on high-growth scalable South African B2B technology companies with impact potential and showing significant returns through exit optionality. The fund will also back entrepreneurs in other African countries who fit this investment profile in collaboration with experienced local partners.

Support for African startups at the early growth stages is key to advancing innovation, job creation, and economic growth on the continent. Despite their immense potential, promising African startups that have managed to grow beyond the Series A funding stage often struggle to find the capital they need to scale further and take their innovations to a global level.

Fund managers need to advance the credibility of the venture capital asset class in Africa through sustained success. Knife Capital has a proven track record of exit-centric business building and preparing South African technology startups for strategic acquisition by the likes of General Electric, Visa, Garmin, and Uber Eats. It successfully divested its entire Fund I, a rare achievement in the African venture capital space.

A broad range of investors committed to Knife Fund III, including the team itself, IFC, the Mineworkers Investment Company (MIC), the SA SME Fund as well as its new Venture Capital Fund of Funds (a pioneering collaboration between government and business that attracted capital from investors like The Department of Science and Innovation, USAID, The Consolidated Retirement Fund for Local Government, and Rand Mutual Assurance), Standard Bank, AfricaGrow (a German Fund of Funds backed by DEG, KfW, and AllianzGI), Skybound Capital, Fireball Capital, and the Draper-Gain family office in partnership with Rand Merchant Bank.

Knife Fund III is already partnering with successful entrepreneurs on the continent. “Since first close, the Fund invested in AI-enabled process optimization company: DataProphet and digital health access platform: Kasha has a strong pipeline of transactions in various stages of closing out,” says Julien Draper, Knife Capital partner, and deal flow custodian.

Knife Capital is a South African venture capital and growth equity investment manager focusing on innovation-driven ventures with proven traction. By leveraging knowledge, networks & funding, Knife Capital accelerates the international expansion of African entrepreneurial businesses that have achieved a product/market fit in a beachhead market. The venture capital is backed by the Draper-Gain family office and invests via a consortium of funds under management. It has offices in Cape Town, London, and Jersey.

Knife Fund I was the successful management of Mark Shuttleworth’s ‘Here Be Dragons’ Fund, which included high-return exits of South African startups to the likes of General Electric, Visa and Uber Eats. Knife Capital continued to advance the credibility of the venture capital asset class in Africa through sustained success in Knife Fund II with a portfolio of disruptive exit-ready startups.

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