HAVAÍC, a leading Venture Capital (VC) firm based in Cape Town, has announced the successful first close of its third African Innovation Fund, raising US$50 million. This milestone is a significant step forward for African technology investments, promising to drive impactful and high-returning ventures across the continent.
Innovation Fund 3 Overview and Objectives
The African Innovation Fund 3, HAVAÍC’s largest to date, secured US$15 million in commitments during its first close in July 2024. This fund aims to bolster 15 early-stage, high-growth, post-revenue startups born in Africa, with a keen focus on scaling regionally and globally. From seed stage to Series A and B, the investments will fortify HAVAÍC’s portfolio, which already boasts a strong presence serving over 20 million customers in 190 countries.
Key Investors and Partnerships
The fund is backed by cornerstone investors Universum Wealth and The SA SME Fund, along with local and international family offices. This collaborative effort underscores the growing confidence and interest in African tech startups from institutional investors. The SA SME Fund is particularly notable for its role in channeling capital into the local VC industry, reflecting a broader trend of support for Africa’s entrepreneurial ecosystem.
Strategic Importance
HAVAÍC’s Managing Partner, Ian Lessem, emphasized the importance of institutional investor relationships in supporting African tech entrepreneurs. He noted that a thriving VC ecosystem translates into economic growth and the creation of skilled jobs, both critical for the continent’s development.
Jonathan Sieff, Managing Partner at Universum Wealth, expressed confidence in HAVAÍC’s expertise and ability to source opportunities that deliver market-leading returns. Sieff highlighted the value of alternative, uncorrelated assets in diversifying portfolios and generating higher returns.
Ketso Gordhan, CEO of The SA SME Fund, pointed out the dual benefits of their investment strategy: achieving commercial returns while addressing social challenges. Gordhan praised HAVAÍC for being at the forefront of innovative solutions that tackle intractable social problems.
Performance and Recent Investments
The announcement follows HAVAÍC’s impressive performance in 2023, which saw a 400% increase in total annual revenue and a landmark fifth exit. The VC firm delivered 193% in total realized exited returns and 120% in total unrealized carrying returns.
Recent investments include:
- Sportable: A sports data and analytics company.
- Follow-on Investments: RNR, RapidDeploy, hearX Group, and AURA.
Notably, RapidDeploy was recognized among Fast Company’s Most Innovative Companies, while hearX Group (#10), FairMoney (#12), and AURA (#27) were ranked in the Financial Times’ 2024 listing of Africa’s fastest-growing companies.
Impact on African Startups
HAVAÍC’s third fund aims to build on the success of its predecessors, a US$6 million Fund 1 launched in 2016 and a US$20 million Fund 2 launched in 2020. Both funds are now fully deployed and on track for additional exits. The increasing flow of funds into African startups is a promising sign for the continent’s tech ecosystem, especially in key markets like South Africa, Kenya, and Nigeria.
Conclusion
The launch of HAVAÍC’s US$50 million African Innovation Fund 3 represents a significant milestone in the advancement of African technology startups. With robust backing from cornerstone investors and a strategic focus on high-growth, post-revenue investments, HAVAÍC is well-positioned to drive substantial economic growth and create meaningful employment opportunities across the continent. This new fund underscores the firm’s commitment to supporting innovative African businesses and contributing to a thriving global tech ecosystem.
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