New USD 17 M Seed Fund Aims to Bridge Funding Gap for South African Startups

A consortium of key institutions, including the SA SME Fund, the Department of Science and Innovation (DSI), the Technology Innovation Agency (TIA), and E Squared Investments, has established a USD 17 M seed fund to support technology-driven startups in South Africa. The “Seed Fund of Funds” aims to address a critical funding gap for early-stage tech ventures in the country, providing seed capital to at least 50 local startups.

The fund is designed to foster innovation and transformation by offering early-stage financing to entrepreneurs. Its goal is to help them turn innovative ideas into locally and globally scalable businesses. Managed by experienced fund managers, the initiative is poised to support the next generation of tech entrepreneurs.

Historically, South Africa’s venture capital ecosystem has focused more on later-stage investments, such as Series A and B rounds, leaving early-stage startups with limited access to funding. The Seed Fund of Funds seeks to bridge that gap and support emerging entrepreneurs.

The fund’s backers believe this initiative will drive innovation and contribute to job creation and economic transformation in South Africa. This aligns with global trends where technology companies are significant job creators, particularly in innovation-driven sectors. Over the next few years, the fund will deploy capital through five skilled fund managers, ensuring long-term sustainability in South Africa’s venture capital landscape.