The fund will focus on companies that have demonstrated early commercial traction but need capital and operational support to reach the scale required by larger institutional investors.

Thandiwe Maqetuka leads Grindstone Ventures, a female-led, black-empowered fund manager established with Knife Capital and Thinkroom.

The fund is targeting an initial close of R150 million, or about $9.3 million, and plans to build a portfolio of 15 to 20 companies, primarily in South Africa while making selected investments elsewhere on the continent.

“The evolution from Seed to Series A remains one of the clearest gaps in the African venture ecosystem,” said Keet van Zyl, co-founder of Knife Capital.

“The lessons from Grindstone Ventures Fund I have shown us exactly where that gap bites, and this fund gives us the opportunity to close it.”

The investment strategy will include follow-on capital for the strongest portfolio companies, allowing Grindstone Ventures to support businesses beyond their initial investment rounds.

The fund also intends to take meaningful minority stakes and work with founders on strategy, governance, commercial growth, market access, future fundraising, and exit readiness.

Maqetuka said many African businesses struggle to secure financing after proving that their product or service has market demand but before they become large enough for institutional investors.

“That is Africa’s missing middle,” she said.

“Our opportunity is not simply to provide more capital, but to identify exceptional businesses earlier, invest at a point where capital remains scarce, take meaningful ownership positions and work actively with founders to build companies capable of scaling, attracting institutional capital and ultimately delivering realisable returns.”

The fund enters a market where African technology financing recovered in 2025, according to Partech Africa, with startups raising $4.1 billion across equity and debt.

South Africa led the continent in both equity funding and deal activity during the year, although funding remains concentrated in a small number of established markets and many early-stage companies still face difficulty raising follow-on equity.

For investors and founders, Grindstone Ventures adds a locally anchored source of capital for the difficult transition between early validation and larger institutional rounds.

Its focus on active ownership, follow-on funding, and exit preparation could help selected African technology businesses build the operating strength and investment track record needed to attract later-stage capital.