South Africa is one of the more prominent nations of the African tech scene. The rainbow nation made it to our list of tech-friendly African governments and there’s an active number of startups and local investors that make for a thriving ecosystem supported by the government.
That being said, you may be wondering how to get funding for your startup since South Africa is so “tech-friendly.’ Look no further as we have compiled a list of government-backed tech funding opportunities in South Africa. This could also serve as a resource for investors and other stakeholders interested in the South African tech ecosystem.
- Black Business Supplier Development Programme (BBSDP): This program is run by the South African Department of Trade and Industry and offers up to R1 million ($76,225) in non-repayable grants for majority (or at least 50%) black-owned businesses (not start-ups). The grants are typically geared towards business development and capital expenditure support.
- Critical Infrastructure Programme (CIP): This program is also operated by the South African Department of Trade and Industry. It focuses on supporting investment for critical infrastructure (so think ISPs and the likes) which in turns reduces the cost of doing business. The program provides up to 30% of total expenditure of the project capped at a maximum of R50 million ($3.8 million).
- Support Programme for Industrial Innovation (SPII): This particular program has multiple subprograms and is designed to promote the development of new technologies in South Africa by financially supporting the development of new technologies and/or processes.
- National Youth Development Agency (NYDA): This government agency will invest between R1000 ($76) and R100000 ($7,621) in South African youths (18-35) in need of business, start-up or growth funding.
- National Empowerment Fund (NEF): There are four “sub-funds” under this government project – all aimed at Black economic empowerment. The iMbewu Fund targets Black-owned startups and will provide funding of up to R10 million; the Rural and Community Development Fund offers funding for acquisition finance, new venture capital and expansion capital of anywhere between R1 million and R50 million; the uMnotho Fund is designed to provide better access to capital for Black entrepreneurs/founders (example: a black-owned startup that want to list on the Johannesburg Stock Exchange); and the Strategic Projects Fund, which is the center of the NEF’s investment strategy, offers venture capital finance targeted at growing new and deliberate industrial capacity within planned sectors.
- Working Capital Fund: This is an initiative of the government of the city of Johannesburg in partnership with SA-based Standard Bank. The project offers government contractors access to a R250 million ($19 million) project fund.
- Technology Innovation Agency (TIA)/mLab Fund: The fund is the product of a partnership between the TIA and non-profit, mLab. The fund provides up to R500, 000 ($38,110) to early-stage local mobile, sensor or wearable app startups.
- Technology Venture Capital Fund: This fund is setup by the DTI but managed by the Industrial development Corporation (IDC) to provide support for business support and seed capital for “the commercialization of innovative products, processes and technologies.”
A Few Numbers
54.6: Amount of funding (million dollars) raised by South African startups in 2015.
3.6: Average valuation of South African startups, according to AngelList.
21: Number of Internet users (million) in South Africa in 2017.
1,526: Number of South African startups in operation, according to AngelList.
Compared to a lot of African governments, South Africa isn’t doing too bad as far as government-backed funding for tech businesses is concerned. It only makes sense for entrepreneurs, stakeholders and businesses to take advantage of these opportunities either by using this article s a resource orexploring available options themselves.
Caveat: We tried to make this article as comprehensive as possible but it’s possible we missed something. Do reach out to us if we have.