SA SME Fund has reportedly invested R110 million in Cape Town based hardware tech incubator Savant. The announcement was made by the R1.4-billion fund’s CEO Ketso Gordhan. Notably, half of the amount committed to Savant will be invested in black African owned firms.
According to a report from Ventureburn, Savant CEO Nick Allen has revealed that a total of R100-million out of the R110-million from SA SME Fund, will be used towards the first close of an R100-million Savant venture fund that will invest in hardware tech businesses with products that are ready to be launched in the market.
The remaining R10-million will be set aside for a seed fund which will be aimed at pre-revenue hardware tech businesses that are not yet market ready.
Allen claimed that the R100-million first close will benefit between 10 to 15 ventures. He added that Savant is planning to bring in other investors and interested partners for its ventures fund and has a targeted next close of R200-million.
Launched in 2016 by Discovery CEO Adrian Gore and former Bidvest chair Brian Joffe under the CEO Initiative, the fund is capitalized by 48 JSE-listed firms. It is aimed to get the private sector to resuscitate the economy.
While Gordhan touted Savant as one of the few leading players in the hardware technology sector in South Africa, Allen described the deal as the next phase in the evolution of the sector. The latter said the SA SME Fund will play a role in Savant’s investment committee.
“Their success is tied up in our success,” Allen said.
He added that Savant already has a couple of black-owned businesses in its portfolio and that the incubator is looking to fund more businesses from outside the Western Cape. He said the incubator has plans to set up an incubation office in Johannesburg.
“Depending on the size of the fund, it’s something we are keen to do,” Allen said.