Investing, and changing the game of Venture Capital in South Africa

By Gavin Reardon, Founder of Kingson Capital

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Investing, and changing the game of Venture Capital in South Africa
Investing, and changing the game of Venture Capital in South Africa

Yesterday President Cyril Ramaphosa addressed guests at the SAIC – South African Investment Conference.

He expressed how South Africa is one of the few countries where Venture Capital as well as Angel Investors are not proliferated throughout the country. We need to see Venture

The confidence and hope at the recent SA Investment Conference, spurred on by the Springboks, was tangible. It’s as if that same momentum, and hope in a better future, inspired the call to action by the President.

While forever there will be detractors, what’s encouraging is the level of commitment by investors, both local and international, to invest in South Africa.

Of particular interest was the commitment by the President to create an enabling and investor friendly environment for startups and small businesses. Recognizing their importance in the economy, the President commented, “Many, if not most, small and medium businesses already make use of technology… and (are) actually making tech their businesses.”

He went on further to say, “We are one of the few countries where Venture Capital as well as Angel Investors are not proliferated throughout the country. We need to see Venture Capitalists and Angel Investors emerging out of the woodworks and funding smaller enterprises. Correctly so, we also need to see Government being willing to take the risk, being willing to back money and being willing to bet on our Small and Medium Enterprises. Countries that have done so have seen enormous success by supporting their small and medium enterprises. This is precisely the route that we will embark on.”

What encouraging words!

I am reminded of Israel as an example and the significant progress they have made. In the tech community, they are known as the Startup Nation, and for good reason. Back in the 1990s, the Israeli Government, in an attempt to spur foreign direct investments into startups, decided to match dollar-for-dollar, every bit of foreign direct investment into technology businesses. It was a bold move, it was a game-changing decision, and one that has yielded significant results. In 2009, $481 million was invested in 107 deals, fast-forward to 2018 and nearly $3 billion dollars was invested. Already this year, as of August, $2,3 billion had been invested. Israel is growing at a rapid rate, their GDP over a similar 10-year period, ending 2017, has nearly doubled in size. The 2017 Bloomberg Innovation Index ranks Israel as the 5th most innovative economy in the world. And it all started with their Government’s support and backing.

We’ve seen first-hand the interest and appetite for international investors to invest in technology businesses in South Africa. With the President’s recent call and commitment to startups and small businesses, we believe this game-changing initiative will yield significant results. We look forward to Institutional and Corporate Investors crowding in as the VC landscape in South Africa transforms to an inclusive digital economy. Well done Mr President.

Join us as we invest.

This is our country, and we invest here.

Written by: Gavin Reardon, Founder of Kingson Capital

About Kingson Capital

Kingson Capital (Kingson) is a Venture Capital firm and also a registered Venture Capital Company (VCC) founded in 2015.  As a Section 12 J VCC, all investments with Kingson are fully tax-deductible in the tax year that they are made.  This has the effect of both lowering the capital at risk and enhancing future returns for investors.  Kingson invests in entrepreneurs who have unique and scalable business concepts, whose products change the current landscape and existing business models.

 

 

 

Issued By: The Lime Envelope
On Behalf Of: Kingson
For Media Information: Bronwyn Levy
Telephone: 011 467 9233
E-mail: [email protected]

 

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