The International Finance Corporation (IFC) announced yesterday it has completed a $10 million equity investment in South African Knife Capital Fund III, dedicated to financing high-growth and expansion-stage tech companies.

Unlike the first two vehicles launched by Knife Capital in 2016 and 2010, respectively, this vehicle mainly targets Series B investments. It aims to reach $50 million on its final closing, five times more than Knife Capital Fund II.

“We are excited to welcome IFC as an investor to our new Fund III and sincerely appreciate the endorsement that comes with the commitment […] With the first close of Fund III, we are finally able to support entrepreneurs on the next stage of the scale-up journey and thereby address a significant gap that currently exists in the African entrepreneurial ecosystem,” said Andrea Bohmert (pictured), partner at Knife Capital.

IFC’s investment was announced in April last year. The institution said it will make a $10 million equity investment that would not exceed 20% of the Fund's total capital commitments. The project’s completion followed its approval by the financial institution's board of directors.

Knife Capital III also plans to increase access to capital for South African startups expanding on the continent and beyond. The vehicle does not rule out follow-up investments in high-potential companies, as well as joint investments with foreign partners. Although South Africa is among the big four countries attracting about 80% of equity funding in 2021 on the continent, it still faces limited access to large financing, which is needed to support high-growth and expansion-stage companies.

Chamberline Moko