Knife Capital closes $50 million fund to invest in growth-stage SA startups

Knife Capital has closed its $50 million Series B fund to invest in the expansion of South African startups primarily, with consideration for startups in the rest of the continent as well.

South African venture capital firm Knife Capital has announced the close of its $50m Series B expansion fund, Knife Fund III. The fund will provide follow-on funding and invest in the expansion of African innovation-driven companies.

“The focus is on high-growth scalable South African B2B technology companies that have impact potential and show strong returns through exit optionality. The fund will also back entrepreneurs in other African countries who fit this investment profile in collaboration with experienced local partners,” the firm said in a statement.

Some of the investors in the fund include the International Finance Corporation (IFC), the Mineworkers Investment Company (MIC), the SA SME Fund as well as its new Venture Capital Fund of Funds, Standard Bank, AfricaGrow (a German Fund of Funds backed by DEG, KfW and AllianzGI), Skybound Capital, Fireball Capital and the Draper-Gain family office in partnership with Rand Merchant Bank.

“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,” said Keet van Zyl, co-founder of Knife Capital. “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,” he added.

The Knife Fund III comes at a time when growth-stage capital has been hard to come by for South African startups. Some experts in the ecosystem have even pointed to the shortage as the reason why the country’s startups tend to exit too early.