Western Cape entrepreneur activity sees province top venture capital deals
The Western Cape has rapidly overtaken Gauteng as the geographic source of the most venture capital-type deals, owing to the number of entrepreneurs, angel investors an independent fund managers in the province, the Southern African Venture Capital and Private Equity Association’s (Savca’s) 2015 Venture Capital Survey revealed.
The survey, which covered 2011 to 2015, showed that Gauteng held 57% of these deals in 2012, but only 20% this year, while the Western Cape’s share rose from 7% to 35%.
Further, the Savca survey highlighted that while the value of new investment activity declined in 2011 to 2015, owing to fund managers taking a more conservative approach to deploying capital in a harsher economic climate, 21 fund managers completed 168 new deals, valued at R856-million.
Of this total deal flow, 55 transactions, or 33%, were categorised as transactions by angel investors, accounting for R42.55-million.
Currently, the venture capital industry had at least R1.87-billion under management invested in active deals at the end of the survey period.
The Savca survey pointed out that of the 132 transactions completed since 2011, with declared exit information, the write-off figures – which comprised 17 of 33 deals – excluded transactions written off by government’s Technology Innovation Agency.
SECTOR BREAKDOWN
The largest number of venture capital deals made between 2011 and 2015 fell in the information and communication technology sector, which saw a 13% increase in software deals to 26% and a 7% increase in e-commerce to 10%.
The biggest decrease in deals was seen in the telecommunications sector, which fell from 16% in 2012 to less than 1% this year, while sectors such as health, food and beverage and mining, mineral and chemicals remained unchanged.
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