The SA SME Fund and government’s Technology Innovation Agency (TIA) have announced a pioneer partnership in the National System of Innovation – a public–private partnership to coinvest R350-million across three venture capital funds.
The funds are OneBio Seed Investment Fund, a biotechnology dedicated fund; Savant Venture Fund, a hardware technology incubator and fund manager (in which two deals have already been pre-funded by the TIA’s Seed Fund); and the newly established University Technology Fund (UTF).
These fund managers will invest in a portfolio of early-stage businesses and provide capital, as well as other support, to the entrepreneurs to help them commercialise technologies and grow their businesses.
The SA SME Fund’s mandate to the three fund managers includes a requirement that they invest at least 50% of the fund into businesses owned by black entrepreneurs.
The parties signed a memorandum of understanding at the Innovation Summit, in Cape Town, last week.
“We are hugely excited and energised by this partnership to support and invest in innovation, especially in black-owned start-ups and scale-ups in this space,” says SA SME Fund CEO Ketso Gordhan.
“This forms part of our commitment to support government, together with the TIA, in stimulating and intensifying technological innovation to improve economic growth, create jobs and impact on the quality of life of all South Africans,” he adds.
“We foresee that the intersection of biology and technology will be a critical component in positioning countries, communities, industries and people to harness the opportunities of the future and we see these funds as a key to unlocking those opportunities,” Gordhan says.
The current value of the fund commitments are: R83.5-million to the OneBio Seed Investment Fund, R111.5-million to Savant Venture Fund and an anticipated commitment of R152.5-million into the UTF.
The SA SME Fund and the TIA have also signed the legal agreements for the OneBio Seed Investment Fund, officially launching the only biotech-dedicated investment fund in South Africa.
“We are thrilled to be partnering with the SA SME Fund and the TIA in launching this biotech investment fund,” says OneBio cofounder Michael Fichardt.
“The fund will provide investment capital to seed early-stage start-up companies. It will help to develop the country’s emerging biotech ecosystem and place South Africa at the front of this new age where we will see engineered biology disrupt many of the globe’s traditional industries.”