Introduction

South African venture capital firm HAVAIC has successfully completed the first closing of its $50 million African Innovation Fund 3. This milestone was achieved in collaboration with cornerstone investors Universum Wealth and The SA SME Fund, as well as local and international family offices, securing US$15 million in commitments by July 2024.

Fund Overview

The African Innovation Fund 3 is set to make 15 investments in early-stage, high-growth, post-revenue businesses originating from Africa. These investments will focus on businesses with regional and global growth potential, ranging from seed stage to Series A and B.

Strengthening the Portfolio

With this fund, HAVAIC aims to strengthen its portfolio, which currently serves over 20 million clients in 190 countries worldwide. This is HAVAIC's third and largest African-focused fund, following its inaugural US$6 million Fund 1 in 2016 and the US$20 million Fund 2 in 2020. Both previous funds are fully deployed and are on track to achieve more exits, following HAVAIC's milestone fifth exit last year.

Key Collaborators

The SA SME Fund, a significant institutional investor, is part of an expanding group putting money into the local VC industry. This, combined with a recent surge in new funding for African entrepreneurs, signals a positive outlook for the continent's burgeoning startup ecosystem. HAVAIC’s primary markets are South Africa, Kenya, and Nigeria.

Investor Insights

Ian Lessem, managing partner at HAVAIC, expressed his optimism, stating, “Our deepening relationship with institutional investors means we can support more African tech entrepreneurs in scaling into new markets and generating diversified revenue for reinvestment into Africa. A thriving VC ecosystem translates into economic growth and the creation of skilled local jobs. We are proud to support positive change in Africa and beyond, and thank our partners for supporting our vision.”

Jonathan Sieff, managing partner at Universum Wealth, added, “We continue to be impressed with HAVAIC’s trademark expertise and proven ability to source compelling opportunities which deliver market-leading returns. Supporting Ian and his team has been a key part of our client offering. Alternative, uncorrelated assets enable our clients to sensibly diversify their portfolios and generate higher returns over chosen investment time horizons.”

Ketso Gordhan, CEO of The SA SME Fund, commented, “Our commitment to HAVAIC represents the fifth commitment by The SA SME Fund’s Venture Capital Fund of Funds to a leading Venture Capital firm. These VC Funds are at the forefront of finding innovative solutions to intractable social problems, allowing us to realize commercial returns to our investors while at the same time achieving real impact.”

Future Prospects

The investments from the African Innovation Fund 3 will not only boost HAVAIC's portfolio but also contribute significantly to economic growth and the creation of skilled local jobs. The thriving VC ecosystem in Africa is poised to generate substantial returns and drive positive change across the continent.