South African female-led VC fund Grindstone Ventures has launched a new ZAR500 million (US$31 million) fund to invest in high-growth, tech-enabled businesses from seed through Series A, targeting the transition from early commercial validation to institutional scale.
Led by Thandiwe Maqetuka and backed by Knife Capital and Thinkroom, Grindstone Ventures combines investment capital with active portfolio support across strategy, governance, commercial growth, market access, capital strategy and exit readiness, leveraging capabilities and networks across the broader Grindstone, Thinkroom and Knife Capital ecosystem.
The new fund, which has a target size of ZAR500 million, follows the successful deployment of Grindstone Ventures Fund I, which invested in seven portfolio companies, including Locstat, Welo and AgriLogiQ. The fund is also finalising a lucrative exit that will return meaningful capital to investors, adding credibility and momentum into the harvesting phase.
“The evolution from seed to Series A remains one of the clearest gaps in the African venture ecosystem,” said Keet van Zyl, co-founder of Knife Capital. “The lessons from Grindstone Ventures Fund I have shown us exactly where that gap bites, and this fund gives us the opportunity to close it.”
The partnership leverages Thinkroom’s experience in entrepreneur development and acceleration and Knife Capital’s track record in venture investment, scaling technology businesses and strategic exits. Together with the Grindstone Ventures investment team, this creates a platform for sourcing and supporting high-growth African companies.
The fund is targeting a first close of ZAR150 million (US$9.3 million) and intends to build a portfolio of 15 to 20 businesses, primarily in South Africa and selectively elsewhere on the continent.
“Some of Africa’s most promising businesses are getting caught in the space between proving that something works and having the scale required to attract larger pools of institutional capital,” said Maqetuka.
“That is Africa’s missing middle. Our opportunity is not simply to provide more capital, but to identify exceptional businesses earlier, invest at a point where capital remains scarce, take meaningful ownership positions and work actively with founders to build companies capable of scaling, attracting institutional capital and ultimately delivering realisable returns.”
While firmly returns-led, the fund also intends to broaden participation in Africa’s venture ecosystem. It aspires for at least 50 per cent of portfolio companies to be black-owned, while ensuring a gender-balanced approach in the representation of female founders and women in leadership.
“We don’t believe investors should have to choose between financial performance and building a more inclusive investment ecosystem,” says Maqetuka.
“Our responsibility is first and foremost to be disciplined stewards of investor capital. But if we can generate attractive commercial returns while directing more institutional capital towards exceptional black and female entrepreneurs who have historically had less access to that capital, we can begin changing both sides of the market.”