The Business 20 (B20) South Africa — the official G20 dialogue forum with the global business community — has announced the formation of a $100m (R1.7bn) fund designed to back African startups.
Unveiled at the B20 South Africa Summit breakfast last Friday, the B20 South Africa Digital Inclusion Fund represents the tangible financial outcome of the Digital Transformation Task Force’s policy work during South Africa’s presidency of the group.
The initiative targets the continent’s persistent digital divide, aiming to direct capital toward entrepreneurs building infrastructure and services for the digital economy.
The “Blended Capital” Model
Rather than operating as a standard Venture Capital (VC) fund, the initiative is structuring itself as a “blended capital” platform. This model typically combines concessional capital (from development finance institutions or philanthropy) with commercial capital (from private investors).
The strategy is designed to de-risk investments in African markets, which can often be perceived as high-risk by global institutional investors.
Shalini Khemka, co-lead of the Digital Inclusion Fund, told the audience in Johannesburg that the fund is in advanced discussions with limited partners (LPs), including development finance institutions and corporate investors.
“2.6 billion people remain excluded from the digital economy, and with it from education, healthcare, finance and meaningful participation in today’s economy,” Khemka noted. “Digital transformation is therefore not just a global imperative; it is a moral one.”
Investment Thesis and Sectors
The fund has earmarked its capital for tech-focused startups that contribute specifically to the continent’s digital infrastructure and accessibility. The mandate covers a broad range of sectors fundamental to the digital economy, including:
- Connectivity: Infrastructure and ISP solutions.
- Financial Inclusion: Fintech solutions for the unbanked or underbanked.
- Education and Healthcare: Edtech and Healthtech ventures increasing access to services.
- Agriculture: Agritech solutions for food security and supply chain efficiency.
The fund’s strategy draws directly from the policy recommendations of the B20 Digital Transformation Task Force. This body is chaired by Phuti Mahanyele-Dabengwa, CEO of Naspers South Africa — one of the continent’s most significant technology investors.
Under Mahanyele-Dabengwa’s leadership, the task force has focused on advancing cyber security, fostering innovation in emerging technologies like AI and blockchain, and creating enabling policies for digital trade.
What Happens Next?
While the fund has been announced, it is not yet open for applications.
According to the B20, the Digital Transformation Task Force will spend the coming months finalizing the fund’s governance structure and securing anchor commitments from stakeholders across the G20 ecosystem.
Once the structure is finalized, a formal call for applications will be issued to entrepreneurs.
The B20 views this fund as an ecosystem play rather than just a source of liquidity. Khemka emphasized that the value add includes connecting innovators with global partners and regulators.
“By aligning capital with connectivity, capability and distribution, we can turn digital inclusion into a driver of opportunity, dignity and shared prosperity,” she said.