IFC COMPLETES $10M INVESTMENT IN SOUTH AFRICAN VC KNIFE CAPITAL

The International Finance Corporation (IFC), a development finance institution, has invested $10 million in Knife Capital’s Knife Fund III, a venture capital firm, to assist growth in South Africa’s digital economy and enhance access to financing for the country’s technology entrepreneurs.

We are excited to welcome the IFC as an investor to our new Fund III and sincerely appreciate the endorsement that comes with the commitment

With the first close of Fund III, we are finally able to support entrepreneurs in the next stage of the scaleup journey and, thereby, address a significant gap that currently exists in the African entrepreneurial ecosystem

According to the IFC, the investment in Knife Fund III would provide financial support to digital entrepreneurs in high-growth industries in South Africa, such as enterprise technology, software, health technology, and financial technology, with strong potential for expansion throughout Africa and beyond.

Read also Knife Capital Backs South African HR Software Startup Wamly In New Funding

Knife Capital hopes to raise $50 million for Fund III, which will focus on investments in the series B, or second round, stage. Knife Fund II debuted in 2016, and Knife Fund I debuted in 2010.

Increasing access to venture capital promotes digital entrepreneurship and innovative tech solutions that enable better delivery of vital services such as healthcare, fintech and logistics. By supporting funds such as Knife III, the IFC can help more startups and digital entrepreneurs innovate and expand in South Africa and beyond

says IFC South Africa country manager Adamou Labara

South Africa’s Internet economy has the potential to grow from $21 billion to $31 billion between 2020 and 2025, and up to $125 billion by 2050, according to the IFC-Google paper ‘eConomy Africa 2020.’ According to the development financing organization, it will be vital to equip local digital companies with the capital they need to establish and scale their goods and services in order to enable this growth.

Read also Andreessen Horowitz Makes First Africa Investment

In South Africa, the level of fundraising volume is relatively high compared to the rest of sub-Saharan Africa, but most venture capital supports early-stage companies in the country, with limited funding available for Series B or later stages of investment

The IFC’s investment in Knife Fund III aligns with its strategy to provide patient risk capital to fund managers in Africa and to support Africa’s technology ecosystem