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Regional Venture Capital Investment reaches new record high

13 September 2018Tanya van Lill, SAVCA
Tanya van Lill, CEO of SAVCA.

Tanya van Lill, CEO of SAVCA.

…Exceeds R 1 billion according to SAVCA 2018 Venture Capital Industry Survey…

• Number of investments increased by 39.5%
• Angel investment almost doubled

The Southern African Venture Capital and Private Equity Association (SAVCA), the industry body and public policy advocate for the asset classes in the region, has announced that the venture capital industry in Southern Africa invested a total of R1.16 billion in 2017; exceeding the R1 billion mark for the first time. This was revealed in the latest SAVCA 2018 Venture Capital Industry Survey, an annual publication that highlights start-up and early growth phase funding activity.

SAVCA, along with research partner Venture Solutions, surveyed 57 fund managers and other industry investors to compile the data. The report shows that overall, at the end of 2017:

• A total of R4.39 billion had been invested in 532 deals, managed by 57 fund managers
• The total value of investments increased by 33%
• Angel investors invested approximately R73 million, compared to R44 million in 2016
• Sectors that attracted the most investment from a value perspective included Manufacturing (10.2% of all active deals); Consumer Products and Services (9.6%); and Software (9.1%)

“SAVCA is very encouraged with the continued growth of the asset class, and although only 15 exits took place during the reporting period, we are confident that as the venture capital sector matures an increase in exits will follow suit,” says SAVCA CEO, Tanya van Lill. “What’s more, we’re particularly excited about the role and future impact that the increased capital flowing to the sector is expected to have on the economy. In line with this, our focus over the next few months will be on conducting research aiming to identify and quantify the overall economic impact of the venture capital and private equity asset classes.”

As a precursor to this, the survey contains a brief socio-economic impact assessment, focusing on responses from 38 venture capital backed South African companies. Research showed that 77% of the surveyed businesses acknowledged the advantage that venture capital investment had on their ability to enhance employment opportunities within their respective enterprises; driving national job creation. In addition, successful VC investments will be celebrated at the inaugural SAVCA Awards to be hosted in Johannesburg on the 8th November 2018. The awards will be an opportunity to showcase the impact that strategic Venture Capital and Private Equity investments can make on individual companies and to the economy at large. 

Adds, van Lill, “Despite the tough economic climate and political uncertainly that characterised 2017, investment activity in the venture capital sector soared. Given the entrepreneurial spirit in the region, the significant impact of small businesses on GDP growth and an increase in investors, we are bound to see the upward trend of deal flow continue in 2018.” 

For full report click here.

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