Key facts
- South Africa SME Fund plans to raise up to 10 billion rand ($609 million) to scale high-growth startups.
- The fund aims to secure an initial 2 billion rand in 2027 and leverage this to raise the remainder from other institutions.
- Futuregrowth Asset Management is raising as much as 600 million rand for its High Growth Development Equity Fund by year-end.
- South Africa led Africa in venture funding in 2025, raising $643 million across 85 equity deals, a 41% year-on-year increase.
- Optasia's $345 million listing on the Johannesburg Stock Exchange was the first major African tech IPO since 2019.
A key South African fund, the South Africa SME Fund, is planning to raise as much as 10 billion rand ($609 million) in venture capital to support high-growth startups. CEO Ketso Gordhan stated the fund aims to secure an initial 2 billion rand in 2027, leveraging this to attract further institutional investment. This initiative is part of an effort to scale startups and accelerate the development of one of Africa's most mature startup markets.
Futuregrowth Asset Management Ltd., a South African fixed-income manager with 193 billion rand ($11.9 billion) in assets, is also raising a fund, the Futuregrowth High Growth Development Equity Fund. This closed-ended fund aims to raise up to 600 million rand by the end of the year, focusing on startups with strong developmental impact. Chief Investment Officer Andrew Canter highlighted the investment opportunities in South Africa's second-largest city.
South Africa has reclaimed the top spot in Africa for venture funding, raising $643 million across 85 equity deals in 2025, a 41% year-on-year increase in value and a 27% increase in volume. This growth is attributed to a broader ecosystem, more local capital, and gradually improving regulations, including exchange control adjustments. The country saw more companies raising capital across various stages, rather than relying on a few large deals.
Recent successes include Optasia, a fintech company, which listed on the Johannesburg Stock Exchange in November at a $1.4 billion market capitalization, raising $345 million. This marked the first major African tech IPO since 2019, making exits feel more tangible for investors. African investors now constitute 31% of active VC players on the continent, reducing dependence on foreign capital cycles. Futuregrowth's existing Development Equity Fund has a track record of successful investments and exits, including Yoco and Ozow, and a recent sale of CashConnect generating a 48% internal rate of return.