Knife Capital closes $50 million African series B fund
South Africa
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10 Aug 2023
Venture capital firm Knife Capital has closed Knife Fund III, a $50 million African Series B expansion fund.
The fund supports the expansion of African innovation-driven enterprises, either as the main investor or through co-investment with other funders from across the continent.
The primary focus is on high-growth, scalable South African business-to-business tech companies with considerable impact potential and exit options. The fund will also finance entrepreneurs in other African countries who fit this investment profile, in collaboration with competent local partners.
Early-stage assistance for African entrepreneurs, according to Knife Capital, is important for supporting innovation, job creation, and economic growth on the continent.
It observes that, despite their immense potential, bright African entrepreneurs who have moved beyond the Series A funding stage usually struggle to get the cash they need to take their discoveries global.
Knife Fund III features a varied set of investors, including the team itself, the International Finance Corporation, the Mineworkers Investment Company, the SA SME Fund, and its new Venture Capital Fund.
The Venture Capital Fund is a government-business collaboration that has attracted capital from investors such as 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 supported by DEG, KfW, and AllianzGI), Skybound Capital, Fireball Capital, and the Draper-Gain family office in collaboration with Rand Merchant Bank.
Keet van Zyl, Knife Capital co-founder says: “We are delighted to bring together such a credible investor base, with a reason to care about the growth of venture capital investments in Africa.
“Most of our investors are co-investment partners, who share deal flow openly and can augment the investments with alternative funding instruments and follow-on funding for enhanced growth. Raising a venture capital fund in Africa is a long and challenging journey, but we could not have scripted the outcome any better.”
Martin Ewald, MD at Allianz Global Investors and lead portfolio manager Impact Investments, says: “In Knife Capital we have found an excellent partner generating real impact on the ground by building and exiting successful companies, utilising their deep experience, value-adding network, and local expertise. We look forward to a fruitful cooperation.”
Ketso Gordhan, CEO, SA SME Fund, says: “Having a home-grown VC fund in Knife Capital with assets under management of R1.3 billion is just a phenomenal growth story for the industry, and testament to what can be done with support of the broader ecosystem.”
Knife Fund III is already partnering with successful entrepreneurs on the continent. “Since first close, the fund invested in AI-enabled process optimisation company: DataProphet and digital health access platform: Kasha and has a strong pipeline of transactions in various stages of closing out,” says Julien Draper, Knife Capital partner and deal flow custodian.