Kingson Fund Two, a dynamic high-growth tech and black-owned SME fund, launched in the first quarter of 2019 at R400 million ($30 million), has been revised to $100 million. The reason behind increasing this up to $100 million is due to the enthusiastic investment appetite and committed capital from international investors.
Recognising the importance of connecting South African startups to international markets and creating a viable venture capital ecosystem in South Africa, Kingson has been building investor networks into the US, and as a result, has garnered US investment support for its Fund Two.
Kingson is therefore also pleased to announce that to anchor its Fund Two, Stat Zero and its investors has committed a multi-million-dollar investment into South Africa to enable Africa to become a global hub for tech innovation. Stat Zero is a digital investment platform aimed at aligning global entrepreneurship, government and venture capital to broaden opportunity and transform communities and global economies.
"We are committed to bringing together innovation and emerging technology, with impact, to enact global change", says Marquis Cabrera, CEO and co-founder of Stat Zero.
"Our investment into Kingson's Fund Two reinforces this mission to evoke change for the better on a significant scale, which will help increase South Africa’s GDP by enabling global market access to Silicon Valley, California and U.S. markets and capital to grow and scale SMMEs in South Africa."
“We are excited to contribute to the growth of VC in South Africa” says Gavin Reardon, founder and managing partner at Kingson.
“We are of the view there exists tremendous opportunity for South African tech companies to provide solutions that are scalable into the rest of Africa and developed markets, and believe that the role of technology in positioning the country and future knock-on effects for youth employment, skills transfer and small business creation is significant”, adds Reardon.
Cabrera affirms this view and says, “Stat Zero invests with governments and investors to transform communities and global economies; South Africa is ripe with talent to invest in impact on a large scale, driving an inclusive digital economy, solving for youth unemployment and enabling new job and market creation.”
Growing the underserved market
The sizeable revision to Fund Two indicates that the team is committed to playing its role in growing this important and underserved market. “Venture capital in South Africa is critical in helping to create an entrepreneurial nation. We view our role as enablers to help connect talented founders and startup teams into the global VC ecosystem”, says Reardon.
Reardon goes on further to add, “for local investors, this is also an opportunity to invest with international investors and participate in an alternative asset class with potentially out-sized returns.”
In addition to the above, Kingson earlier this year secured a $10 million loan portfolio guarantee facility from the United States Government through the United States Agency for International Development (“USAID”). The guarantee is a risk sharing facility on debt issued by Kingson, which is supported by the United States Treasury.
"USAID recognises the value of venture capital within South Africa, and we are committed to supporting Kingson and its Fund Two in its continued effort to harness the potential of both small business and economic development within South Africa", says USAID Mission Director, John Groarke.
The Chargé d'Affaires of the US Mission to South Africa, Ms. Jessica Lapenn, who co-hosted the USAID signing and launch ceremony earlier this year, added, “We are so pleased to learn of Stat Zero’s investment in Kingson; this partnership aligns with the United States Government’s support to facilitate and increase trade and investment between the United States and South Africa, and with the rest of Africa.”
With a relatively new and emerging class of venture capital in South Africa, the amount of readily available capital for startups is still small. Kingson’s focus with Fund Two is to help facilitate investment, by both local and international investors, into technology companies that will help shape emerging technology for Africa’s digital economy.
"This is an exciting time for us as we look to identify, invest and help accelerate the most promising high-growth tech companies. South Africans are entrepreneurial by nature, and what we are looking to do with this fund is back these companies that can scale into other markets,” concludes Reardon.
