Endeavor South Africa has secured R190 million in the first close of its R500 million Harvest Fund III. This exceeds its initial target of R150 million, marking a significant milestone in the company’s efforts to support tech-related companies across Africa.
The fund aims to drive growth in high-potential companies, focusing on those with scalable intellectual property (IP) and a strong local and global presence.
Major investors include Standard Bank, Allan Gray, and the SA SME Fund. The first close also aligns with the final investment of Harvest Fund II, which raised R190 million and made 19 investments in 17 companies.
The focus of Harvest Fund III is clear: it aims to double down on the strategy that worked for Fund II. “We are doubling down on a strategy that is working,” said Antonia Bothner, Capital Markets Lead at Endeavor South Africa.
The fund will invest in existing Endeavor companies that demonstrate strong growth and a commitment to giving back to the community.
The fund plans to back 135 vetted companies, with 85% of the investments going to businesses in Southern Africa. It will focus on 20 to 25 companies in the region and five in other African areas.
Endeavor targets a return of 25% or a three-to-four multiple on invested capital (MOIC). Deal sizes will range from R15 million for established Endeavor companies to R7.5 million for early-stage ventures.
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Endeavor Proven Track Record of Growth
Alison Collier, Managing Director of Endeavor South Africa, is confident in the businesses in their pipeline. “We have a deep understanding of the 135 businesses in our pipeline and are confident in their growth potential,” she explained.
These companies have been through Endeavor’s rigorous two-stage selection process and are poised for continued success.
Harvest Fund III follows the impressive success of Harvest Fund II. The previous fund’s portfolio included companies in enterprise tech, fintech, retailtech, and edtech, achieving 58% annual revenue growth.
These companies collectively reached R7.7 billion in revenue by December 2023. Additionally, they created over 9,200 jobs, representing a 35% increase in employment.
Standard Bank, one of the fund’s major investors, expressed confidence in Endeavor’s approach. “Our decision to invest is strongly influenced by the extent and quality of Endeavor’s network and strong selection process,” said Anwar Harris, Head of Investments at Standard Bank Corporate and Investment Banking.
Ketso Gordhan, CEO of the SA SME Fund, echoed similar sentiments. “Endeavor’s support of potential target investments is a significant factor in providing investors with a sense of security,” he said.
Driving Economic Growth and Innovation
The fund also received support from Prosper Africa’s Catalytic Investment Facility, allowing Endeavor to scale its fundraising efforts. British A. Robinson, Coordinator of Prosper Africa, said the first close marked a great achievement. “The announcement of the first close of the fund is a fantastic milestone in a challenging fundraising environment,” she stated.
Endeavor South Africa is committed to empowering the next generation of business leaders across Africa. Through mentorship, a trusted network, and access to capital, the company continues to drive innovation and growth on the continent.