Digital Africa Ventures (DAV), a local venture capital (VC) firm focused on tech start-ups, has raised R25 million, which will be invested in innovative South African businesses.
Funded by Thandeka Xaba and her business partner Nonkululeko Komanyane in 2020, DAV bills itself as one of the few black female-led VC funds in SA, with founding principals under the age of 35 years.
The Johannesburg-based fund invests in early-stage South African tech companies, targeting the under-served small business sector, by bridging the funding and support gap for early stage tech entrepreneurs.
The DAV Fund is anchored by the SA SME Fund and is further supported by E-Squared Investments and PAPE Fund Managers, which invested in the recent R25 million funding round.
The female duo say they have collectively raised R26.5 million in seed funding for early-stage digital tech start-ups since establishing the VC firm, and are looking to support more entrepreneurs through the latest funding round.
“Digital Africa Ventures’ investment thesis is focused on writing cheque sizes for start-ups of between R2 million to R5 million, which is difficult to raise in SA since there is generally a concentration of funding appetite in the brackets below R2 million and above R7.5 million.
“We do not only deploy capital but also assist investee companies with their strategy and in reaching key milestones. Our approach also assists with strategic support in operations, sales, marketing and business development,” explains Komanyane.
Since inception, DAV has engaged with over 60 start-ups and assisted numerous entrepreneurs along their respective journeys by way of thinking through strategy, cap tables, user journeys, employee stock ownership plan, or overall feedback on their business model.
“We like to help as much as we can regardless of whether we will be investing in a business or not. We believe acts like these benefit the ecosystem as a whole and are needed to help South Africa's venture capital ecosystem advance and compete globally,” Komanyane points out.
DAF made its first investment on 31 March 2021 in Tripplo Software, a digital logistics platform that facilitates the safe and efficient movement of road freight cargo across SADC.
Within its second year of operations, Tripplo has over 400 transporters on its platform and has facilitated movement of cargo within SA and across borders between Angola, Botswana and DRC, among other African countries.
“Since 60% of South Africa’s tech entrepreneurs are black, the need for support at the early stages of their businesses will ultimately drive the technological advancement, job creation and economic growth desperately needed in South Africa and elsewhere in Africa,” adds Xaba.
“The recently raised funds will be invested into early-stage digital technology start-ups. There is a lack of capital in the seed investment stage other than from friends and family. In addition, entrepreneurs who have innovative ideas and the requisite skills to build a business are left unsupported at times, as they do not have access to generational knowledge and wealth.”
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