South African VC firm Knife Capital has reached final close of its US$50 million African Series B expansion fund, Knife Fund III.
The Cape Town-based Knife Capital is a venture capital and growth equity investment manager focusing on innovation-driven ventures with proven traction. By leveraging knowledge, networks and funding, Knife Capital accelerates the international expansion of African entrepreneurial businesses that achieved a product-market fit in a beachhead market.
Knife Fund III supports the expansion of African innovation-driven companies to fill a critical follow-on funding gap, as lead investor and through co-investment with other credible funders across the continent. The focus is on high-growth scalable South African B2B technology companies that have impact potential and show strong returns through exit optionality. The fund will also back entrepreneurs in other African countries who fit this investment profile in collaboration with experienced local partners.
A broad range of investors committed to Knife Fund III, including the team itself, the International Finance Corporation (IFC), the Mineworkers Investment Company (MIC), and the SA SME Fund, as well as its new Venture Capital Fund of Funds, a pioneering collaboration between government and business that attracted capital from investors like The Department of Science and Innovation, USAID, The Consolidated Retirement Fund for Local Government and Rand Mutual Assurance.
Other investors include Standard Bank, AfricaGrow, Skybound Capital, Fireball Capital, and the Draper-Gain family office in partnership with Rand Merchant Bank.
“We are delighted to bring together such a credible investor base with a reason to care about the growth of venture capital investments in Africa,” said Keet van Zyl, who co-founded Knife Capital in 2010 with Eben van Heerden. “Most of our investors are co-investment partners who share deal flow openly and can augment the investments with alternative funding instruments and follow-on funding for enhanced growth. Raising a venture capital fund in Africa is a long and challenging journey, but we could not have scripted the outcome any better.”
Knife Fund III is already partnering with successful entrepreneurs on the continent.
“Since first close, the fund invested in AI-enabled process optimisation company DataProphet and digital health access platform Kasha, and has a strong pipeline of transactions in various stages of closing out,” said Julien Draper, Knife Capital partner and deal flow custodian.