Grindstone Ventures has launched a $6.5 million (R100 million) fund that will offer seed funding to predominantly South African-owned technology startups that have either participated or have completed the Grindstone Accelerator programme.
Grindstone Accelerator is a years-long entrepreneurship development programme for small-to-medium-sized businesses in South Africa that’s jointly owned by Knife Capital and Thinkroom Consulting. The new fund will target 30 to 50 early-stage startups with strong intellectual property, a high growth potential, and the ability to raise follow-on capital from credible funders in the ecosystem, and deliver sustainable cash in the long term.
The fund will invest through a SAFE (simple agreement for future equity) model, aligning the speed of negotiation and execution with the investment stage. Catherine Young, Andrea Bohmert, Rapelang Rabana, and Grace Legodi are the female-led team behind Grindstone Ventures with an exceptional depth of expertise across the funding value chain and a proven track record in scaling startups. Leading venture capital firm Knife Capital will oversee certain elements of the funds’ management.
Catherine Young, the Managing Partner Grindstone Ventures aims to “provide superior returns to investors and to create sustainable yields over the long term.” Young further revealed that the first investment came from the SA SME Fund. Ketso Gordhan, SA SME Fund CEO pointed out their intent to “fill a vital gap in the post-seed market.”
Grindstone Accelerator has nurtured some of the country’s top tech startups that have attracted further investment. For instance, as iKubu a radar startup was recently acquired by Garmin, AR animation and gaming startup SeaMonster secured $1 million from the Vumela Fund, online payment gateway Payfast acquired by DPO Group. Other companies are on-demand grocery delivery service OneCart.