South African VC firm Knife Capital launches 2nd 12J Venture Capital Fund

South African VC firm Knife Capital launches 2nd 12J Venture Capital Fund

Published: 01-02-2021 14:04:00 | By: Pie Kamau | hits: 3885 | Tags:

South Africa’s VC firm Knife Capital announced the launch of its second Section 12J Venture Capital Fund to allow new investors to participate.

Section 12J venture capital company (VCC) was established to facilitate equity investment into higher-risk SMEs.  Qualifying investors in approved Section 12J VCCs can deduct the full amount of their investment from taxable income in the tax year that the investment is made.

Having deployed most of its first ZAR250 million ($16.4 million) Section 12J Venture Capital Fund, Knife Capital has now launched KNF Ventures II which has the same investment mandate as Fund I. By leveraging Knowledge, Networks & Funding, KNF aims to accelerate the growth of South African innovation-driven SMEs to generate enhanced returns for entrepreneurial-minded investors.

Keet van Zyl, Partner at Knife Capital said the pandemic has rapidly increased the adoption rate of digital technologies, putting the spotlight on disruptive startups. “There is a tangible shift towards embracing new ways of working, learning, interacting and transacting. This can also be felt in the investment space. Certain alternative asset classes like venture capital – where fund managers have been investing in technology companies for years – are experiencing increased interest from institutional and individual investors wanting to diversify.” he said.

Andrea Bӧhmert, Partner at Knife Capital contextualises the effects of COVID on the current KNF I portfolio: “There has been a significant impact on our broader Knife Capital portfolio, but interestingly – not necessarily all negative. The resilience of a long-term investment strategy is being tested and a diversified portfolio is a good thing in times like these. The portfolio value keeps growing and some of our companies like educational content marketplace Snapplify and pharmaceutical temperature monitoring solutions company PharmaScout really benefited.’’

Snapplify provided free access to e-textbooks for remote learners during the crisis and while ticketing platform Quicket was hard hit initially, it launched new successful online products in high-load hosted streaming and fundraisers. 

In many ways, Andrea said the portfolio is coming out stronger. ‘’We are proud of the entrepreneurs we backed and the way they are navigating through this crisis with solid business models and a positive culture,” she added. 

www.knifecap.com