The South Africa SME Fund — one of the country’s leading entrepreneurship support vehicles — is targeting approximately $609 million in venture capital to finance high-growth startups and strengthen the nation’s technology ecosystem.
According to Bloomberg, the fund plans to complete an initial close of around $122 million in 2027, a figure that will serve as an anchor to attract additional investment from other financial institutions, chief executive Ketso Gordhan said.
Established by the CEO Initiative — a platform bringing together the leaders of the 50 largest companies listed on the Johannesburg Stock Exchange — the fund aims to reduce the barriers facing small and medium-sized enterprises and accelerate the development of a more enabling environment for entrepreneurship.
‘The objective is to help companies with high potential to grow and to build a stronger business ecosystem,’ Gordhan said, as quoted by South African media. He noted that the new fundraising follows a first fund of $104 million launched roughly a decade ago, which received backing from institutions including the Public Investment Corporation (PIC), technology group Naspers, and telecommunications operator Vodacom.
The initiative comes as South Africa’s venture capital sector enters a new phase of maturity. A study conducted by the SME Fund, Endeavor, and the Southern African Venture Capital and Private Equity Association found that, over the past decade, funds invested more than $975 million across 1,142 companies.
Of the total invested, approximately $305 million has already been recovered through 226 exit transactions, including stake sales, acquisitions by larger corporations, and stock market listings.
‘South Africa has managed to double the size of its venture capital market over the last five years,’ said Alison Collier, managing director of Endeavor South Africa. She believes the planned expansion of available capital could allow the sector to double again over the next three to five years.
Venture capital has assumed an increasingly important role in financing startups and small businesses that typically face difficulties accessing credit through traditional banks. For investors and specialists, the growth of these companies has the potential to create employment and develop new economic sectors.
Against a backdrop of sluggish economic growth and high unemployment, the expansion of successful startups is regarded as one of the alternatives for addressing some of the most deep-rooted structural challenges facing the South African economy.
Among the sector’s success stories is financial technology company Optasia, which achieved a valuation of more than $1.4 billion following its listing on the Johannesburg Stock Exchange, becoming one of the examples of South African startups capable of reaching ‘unicorn’ status — companies valued at more than $1 billion. Endeavor also backs TymeBank, a fintech valued at more than $1.5 billion.
Despite the progress made, one of the sector’s most persistent challenges remains finding reliable pathways for investors to exit their positions. ‘The ability to create exit pathways is a fundamental signal of a healthy venture capital ecosystem, because investors need confidence that successful companies will be able to generate liquidity,’ Collier explained.
According to the specialist, South Africa has seen an increase in acquisitions by both domestic and international companies, alongside the development of a secondary market that has opened new opportunities, particularly in the fintech sector.
‘The creation of multiple exit routes demonstrates that the market is evolving and gives investors greater confidence to back new companies,’ Collier concluded.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/07/27/mundo/africa/africa-do-sul-sme-fund-quer-609-m-para-acelerar-startups-tecnologicas/
