Endeavor South Africa has announced the first close of its R500 million ($28.6 million) Harvest Fund III, securing R190 million ($10.8 million). The fund, which exceeded its initial target of R150 million ($8.5 million), aims to invest in promising tech companies across Africa, with a primary focus on South Africa. The announcement follows a rigorous selection process designed to identify high-potential businesses across the continent.
Alison Collier, Managing Director of Endeavor South Africa, emphasized the careful due diligence involved in selecting companies for investment. “We have a deep understanding of the 135 businesses in our pipeline and are confident in their growth potential, as they have been selected through Endeavor’s rigorous two-stage international selection process, which spans one to two years,” she stated.
The Harvest Fund III is designed to build on the success of its predecessor, Harvest Fund II, which launched in 2021. The previous fund invested R190 million in 17 companies and delivered strong returns, with an impressive 58% annual revenue growth across its portfolio. By the end of 2023, these companies had generated R7.7 billion in revenue and created more than 9,200 jobs.
Endeavor aims for similar outcomes with Harvest Fund III, targeting a return of 25%, or three to four times the invested capital. The fund’s strategy is largely based on investing in its pipeline of 135 pre-selected companies, which have been vetted through Endeavor’s international selection process. It expects that around 85% of the capital will be allocated to South African companies, with the remaining funds going to ventures across the continent.
Harvest Fund III attracted a range of notable investors, including Standard Bank, Allan Gray, and the SA SME Fund. These strategic partners reflect the growing interest in backing tech startups that are poised to transform sectors such as financial services, healthcare, and logistics in Africa.
Collier highlighted the importance of aligning investment with strong, scalable companies that can make a significant impact on Africa’s tech ecosystem. “The track record of our previous fund shows the potential of investing in high-growth companies. Our portfolio from Harvest Fund II includes unicorns like Go1 and TymeBank, and innovators such as Clickatell, Sendmarc, and digital payment platform Onafriq (formerly MFS Africa), as well as iiDENTIFii and Ozow,” she noted.
Endeavor’s focus on scaling businesses that have already demonstrated their ability to grow in tough environments is critical to its strategy. The company’s track record suggests that it will continue to foster some of Africa’s most successful tech ventures as it moves into this new phase of investment. As the continent’s tech sector continues to attract global attention, Endeavor’s role in identifying and supporting high-impact entrepreneurs is expected to play a crucial part in shaping the future of African innovation.