Endeavor South Africa, which offers venture capital and mentoring support to domestic and African entrepreneurial enterprises, is targeting to invest in up to 30 tech and tech-enabled companies through its recently launched R500-million Harvest Fund III.

MD Alison Collier says the fund, which was launched in March, aims to follow on from the success of Harvest Fund II, which raised R200-million and has invested in 17 companies to date, making it the most active South African venture capital fund for 2021 and 2022.

Harvest Fund III, she reports, is on track for a first close of R150-million in September and has secured interest from both existing and institutional investors, including pension funds.

“It is encouraging to see a growing interest in venture capital as an asset class.

“Recently there have been exciting developments in the sector, with two South African Fund of Funds launching and securing capital from the government and pension funds to invest into this high-growth and job- generating sector,” Collier says.

Endeavor South Africa’s funds are so-called ‘follow funds’ rather than lead investors, with the organisation using its network to match strategic investors with entrepreneurial firms that have already been screened.

Founded in 2004 by well-known South African business personalities Adrian Gore, David Frankel, Isaac Shongwe and Paul Harris, Endeavor South Africa has screened some 60 000 businesses and has a pipeline of 127 companies.

Sixty of these companies have already been integrated into its portfolio and have access to some 165 active mentors, including those drawn from the Endeavor Global Mentor Network, which includes more than 5 000 mentors.

Collier reports that the Harvest Fund II portfolio of 17 companies achieved a combined R5.7-billion in revenue in 2022, and collectively employed 9 600 people.

The businesses are delivering 123% annual revenue growth and, in 2022, created an additional 2 800 jobs, 75% of which were for black South Africans and 90% for youth.

Some of the better-known businesses associated with Endeavor South Africa are MFS Africa, a digital payments gateway with services in 42 African markets; TymeBank, which has grown to serve seven-million lower income banking customers; HelloPaisa, a provider of payment mechanisms for township entrepreneurs and small businesses; YeboFresh, which is supplying fresh and other consumer goods to township spaza shops; and Go1, an aggregator of content from top education and training providers across a range of industries and topics.

Besides streamlining South Africa’s financial regulations to support foreign investments into high-potential South African startups, Collier says changes to South Africa’s visa system are also required to ensure that these businesses have access to the skills they require to grow.

“I think that the process under way at Home Affairs to try and solve this for corporates should also be extended to entrepreneurs,” she concludes.