Stocks & Strauss, a South African investment holding company, has announced the near-completion of fundraising for its University Technology Fund II (UTF II), securing a substantial portion of its R400m ($21.4m) target. The fund aims to capitalise on the growing interest in university-generated intellectual property (IP) by investing in spin-offs emerging from South African institutions.
UTF II will target 15 to 20 investments, focusing on scalable technology IP across diverse sectors. The fund’s strategy is to provide capital for technology commercialisation and growth, supporting ventures with high potential. This targeted approach builds on the experience of UTF I, which demonstrated the potential of university-linked technologies. Previous investments include Hyrax Biosciences, a bioinformatics company instrumental in the early detection of the Omicron Covid-19 variant, and CubeSpace, a satellite control systems company recognised by NASA and serving over 250 global clients.
“The world is witnessing a shift towards valuing university intellectual property as an important asset class and opportunity,” said Wayne Stocks, managing partner at Stocks & Strauss Fund Manager. “These companies are also providing solutions to real-world challenges, which boosts their impact and value.”
UTF II has broadened its investment mandate to include spin-offs from South African university alumni, a move intended to foster a stronger entrepreneurial ecosystem around these institutions. This approach echoes the influence of Stanford University on Silicon Valley, aiming to leverage the talent and drive of graduates to stimulate national innovation and economic growth. “Universities are unparalleled hubs for deep-technology investment opportunities in Africa,” added Mr. Stocks. “They possess the capacity, skilled talent, cross-faculty institutional knowledge and long-term funding necessary to drive meaningful innovation and development in this space.”
The fund has attracted significant backing from anchor investors including the SA SME Fund, Stellenbosch University, and Allan & Gill Gray Philanthropies Africa. Other key university investors include the University of Pretoria, the University of Cape Town, and the University of the Witwatersrand. This diverse investor base underscores the collaborative nature of the fund and its shared vision for fostering innovation.
Ketso Gordhan, CEO of the SA SME Fund, emphasised the UTF’s role in shaping South Africa’s economic future. “The UTF Fund I is a powerful example of what can be achieved when we align resources to unlock the potential of South Africa’s brightest minds and world-class intellectual property,” he said. “UTF Fund II will elevate our innovation landscape further and we foresee that it will attract both local and international investment interest.”
Stellenbosch University’s chief director of Innovation and Commercialisation, Anita Nel, highlighted the benefits for the university. “Stellenbosch University partnered with the University Technology Fund II to support innovation on our campus and to help students, staff, and alumni bring their ideas to market,” she explained. “The fund accelerates the development of new technologies and reinforces the university’s reputation as a hub for research and innovation and builds on the successful relationship between our university and the UTF I. Additionally, the partnership offers potential financial returns that can be reinvested in research and infrastructure.”