Research by the Southern African Venture Capital Association (SAVCA) shows that growth in the country’s venture capital (VC) industry remains robust.
The 2022 SAVCA Venture Capital Industry Survey findings revealed that early-stage fund managers invested R1.31 billion into 121 entities through 186 investment rounds.
The industry survey covered equity investments into startups and early-stage businesses for 2021.
The results showed that investment activities in 2021 were similar to those observed in 2020.
The ICT sector accounted for 57% of all VC deals in South Africa in 2021, which corresponds with trends in more developed VC markets like the United States and the United Kingdom.
Financial technology (Fintech) and education and training technology (EdTech) deals make up a quarter (25%) of all deals concluded during the year.
FinTech maintained its dominance amongst investors by attracting the most deals during the period.
The five sectors which attracted the greatest number of deals in 2021 in South Africa were:
- Fintech (15.9%)
- EdTech (9.1%)
- Consumer Products and Services (7.9%)
- ICT – other (7.9%)
- Software (6.7%)
Together, these five sub-sectors amounted to 44.7% of all capital invested in 2021.
Fintech also attracted the second largest rand value of investments – R298 million – beaten only by the food and beverage sector, which maintained its leading position from the previous year.
Other notable findings included that Gauteng and the Western Cape remain VC’s preferred investment destinations.
Johannesburg topped Cape Town in receiving the most deals by number in 2021.
However, Cape Town remains the base for the biggest pool of companies in the active portfolios of VC fund managers.
The charts below give an overview of the 2022 SAVCA Venture Capital Industry Survey findings.