The South Africa SME Fund is preparing to mobilize up to R10 billion in venture capital, with an initial R2 billion tranche targeted for 2027, according to chief executive Ketso Gordhan. The capital is earmarked for scaling high-growth startups and deepening the financing infrastructure across the continent’s most developed startup market.
The fund, established by the CEO Initiative, a consortium of leaders from the 50 largest corporations listed on Johannesburg’s bourse, plans to use that first tranche as a lever to attract additional institutional capital. Gordhan described the approach as a continuation of earlier fundraising work: the fund raised R1.7 billion roughly a decade ago with backing from the Public Investment Corp, Naspers, and Vodacom Group. Discussions are now underway with those same investors, and others, about reinvesting proceeds from the original portfolio.
The timing reflects a measurable shift in the sector’s operational maturity. Research released Thursday by the SME Fund, Endeavor, and the Southern Africa Venture Capital and Private Equity Association tracked the industry’s evolution over the past decade. Funds have deployed just over R16 billion across 1,142 companies during that period, with nearly R5 billion realized through approximately 226 exits. Alison Collier, managing director of Endeavor South Africa, noted that the market has doubled in size over the past five years and that current expansion plans could produce another doubling within three to five years.
Exit pathways have historically been the structural bottleneck constraining venture-capital development in South Africa and across the continent. That is changing. Growing merger and acquisition activity, involving both local and international corporate buyers, has opened more routes for founders and investors to realize returns. A secondary market is also taking shape, with initial public offerings becoming increasingly available to startups, particularly those in fintech.
The numbers bear this out. Optasia, a fintech platform, achieved a $1.4 billion valuation through a Johannesburg listing last year. Tyme Bank, another fintech venture in which Endeavor holds an investment stake, is valued at more than $1.5 billion. Transactions at this scale generate the kind of liquidity that makes sustained venture-capital deployment viable, not just aspirational.
The broader stakes are considerable. South Africa faces persistent slow economic growth and elevated unemployment, and venture capital has become a meaningful financing channel for startups and smaller businesses that cannot access traditional bank lending. Scaling these ventures is widely viewed by investors and policymakers as one of the more direct routes to job creation and new industry development.
Whether the fund can close its 2027 target on schedule, and whether the institutional investors from the original round recommit, will be the first real test of how far the infrastructure has actually come.