Non-profit organisation Empire Partner Foundation (EPF) has partnered with the Cape Town-based EPF Tech Fund, in launching a multimillion-rand start-up investment fund, which will invest in pre-seed stage companies.
The foundation says its fund identifies and rewards young, high-potential, innovative entrepreneurs to spur economic development in the country using technology.
The fund, in its second phase, announced yesterday it is raising a further R80 million to invest in students and graduates, who are developing tech solutions that create a meaningful impact.
According to the fund, in its first phase, it invested in 20 data start-up firms in the last 18 months, with a combined value of R150 million.
In the latest phase, the first investors in the fund are NMVE Capital, TDM Ventures and Digication Ventures, and 15 start-ups will benefit.
Beneficiaries currently include start-ups such as Agricode, Digital Pulse, What the Hack, MicroApps, Tech Swat and Makwarela Campus 123.
To qualify for funding, start-ups must have locally-developed tech solutions, be youth-led and driven
EPF says the tech fund is a privately managed and investors in the project are companies that are committed to “future-proofing Africa by investing in youth-led technology solutions that are scalable across the continent”.
It adds the objective is to align with EPF’s desire to solve the 10 key public sector challenges using tech solutions.
The 10 socio-economic challenges the organisation is trying to solve through technology are water, energy, healthcare, education, agriculture, rural development, transport, housing, unemployment and security.
“This is a great impact on creating new opportunities for the large asset pool. We will be able to start moving from the unemployed to self-employed.
“We are the venture capital investors for students that excel at the EPF Incubation Hub,” says Mikhial Mariemuthu, senior manager at EPF.
“The EPF Incubation Hub enables students that have won the monthly hackathons to develop their winning solutions into viable products. We have created companies for these students.
“Our objective is to develop young entrepreneurs, propel South Africa forward into the 4IR [fourth industrial revolution], solve key challenges through tech, empower young people to become leaders in the tech space and drive South Africa's economic growth by assisting tech start-ups.”
Access to finance has been cited as one of the biggest obstacles entrepreneurs face in SA, according to the Small Enterprise Development Agency (SEDA).
SEDA, which supports the growth of small business in SA, says start-ups often don’t have the capital to fund their efforts and don’t have a strong enough credit rating to receive funding.
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