The fund, known as the “Seed Fund of Funds,” will provide much-needed early-stage capital to local startups, addressing a significant funding gap that has historically hindered the growth of emerging technology-driven businesses in the country.

The initiative is expected to support at least 50 startups by providing seed capital, with a strong focus on fostering innovation and driving transformation within the South African economy.

The fund will be managed by experienced fund managers, who will help entrepreneurs turn their innovative ideas into scalable ventures with the potential to succeed both locally and internationally.

Ketso Gordhan, CEO of the SA SME Fund, highlighted the crucial role that seed funding plays in driving entrepreneurship and innovation.

“Seed funding is the lifeblood of innovation and entrepreneurial growth. Without it, many great ideas would never see the light of day. This fund will ensure that South Africa’s brilliant minds have the resources they need to succeed,” he said.

South Africa’s venture capital ecosystem has traditionally focused on later-stage investments, leaving early-stage startups with limited access to capital.

The launch of this seed fund aims to bridge that gap, creating an environment where emerging entrepreneurs can thrive.

In addition to supporting innovation, the fund’s backers believe it will contribute to job creation and economic transformation, aligning with global trends where tech companies are key drivers of employment in innovation-led industries.

Over the next few years, the fund will distribute capital through five skilled fund managers, helping to ensure the sustainability of South Africa’s venture capital industry while empowering the next generation of tech entrepreneurs.

Patrick Krappie, acting CEO of TIA, noted the importance of this initiative for the country’s entrepreneurial landscape, stating, “This fund will play a catalytic role in building the foundations of a strong seed-stage funding ecosystem.”

Gladwyn Leeuw, CEO of E Squared Investments, echoed this sentiment, emphasizing the role of accessible capital in driving innovation and economic growth.

E Squared Investments, known for its commitment to transformative change, is a key player in this fund, supporting the vision of fostering technological advancement and economic progress in South Africa.