South African venture capital firm Hlayisani Capital has held a first close of R500m ($30.97m) for its second fund, Hlayisani Venture Fund II (HVF II), with the country’s largest state asset manager and a prominent corporate fund anchoring the vehicle.
The firm stated, in a press release, that the Public Investment Corporation (PIC) and the SA SME Fund have come in as cornerstone investors. They are joined by a group of family offices and private investors. Hlayisani is currently in discussions with additional South African institutional investors and expects to reach a final close by June 2026.
The fundraising milestone comes at a critical time for South Africa’s early-stage ecosystem. While seed capital has become more accessible in recent years, growth-stage funding — typically Series A rounds ranging from R50m to R100m ($3.1 million to $3.15 million USD) — remains scarce .
Bridging the Series A gap
Hlayisani Venture Fund II is designed specifically to address this bottleneck. The fund targets scalable, technology-enabled businesses that have already achieved product-market fit and are ready to accelerate. Its focus sectors include artificial intelligence, fintech, healthtech, edtech and digital infrastructure.
This strategy builds on the track record of the firm’s previous vehicles. According to the Hlayisani website, the Hlayisani Growth Fund held a final close at R354m in 2021, building a portfolio of eight companies in education, telecoms and communications . The firm now manages over R1bn across three funds.
Early deployment into AI and digital infrastructure
HVF II has already begun deploying capital, with three investments completed to date.
The fund has taken a stake in Tractor Outdoor Media, a company transforming the out-of-home advertising sector through digital infrastructure assets. A second investment was made into Spatialedge, a Stellenbosch-based enterprise AI firm that helps consumer-facing businesses make data-driven decisions. Spatialedge secured R60m in funding from the Hlayisani Growth Fund in 2024 .
The third portfolio company is Cogitait AI, which is building solutions focused on operational intelligence and automation.
These early bets reflect a broader investment philosophy that prioritises founders addressing tangible economic challenges. “Our approach goes beyond funding — we provide strategic insight and a vast network to empower our portfolio companies at every stage of their growth journey,” the firm states on its website .
Institutional capital
The composition of HVF II’s investor base is noteworthy. The involvement of the PIC — which invests funds on behalf of South African government employees — and the SA SME Fund signals a gradual but meaningful shift in how local institutional capital views venture as an asset class.
Recent data from the Southern African Venture Capital and Private Equity Association (SAVCA) shows that venture capital investment activity reached R13.35bn ($843M) in 2024, with fintech, software, AI and digital platforms accounting for the majority of deals . However, the sector has historically relied on high-net-worth individuals and family offices rather than pension funds and large asset managers.
The SA SME Fund, established by some of South Africa’s largest corporates, has been a catalyst for changing this dynamic. In a recent opinion piece, representatives from the fund argued that the country’s venture ecosystem now requires “exponential growth” to remain globally competitive, noting that while South Africa dominates African venture funding, the continent as a whole attracts less capital than individual US cities .
Track record
Hlayisani Capital was founded in 2016 through a partnership between Angelhub Ventures — backed by former FNB CEO Michael Jordaan and Kevin Harris — and Dzana Investments, the family investment vehicle of Dr Reuel Khoza . Khoza, a prominent business leader and former chairman of Nedbank, currently serves as chairperson of the PIC.
The firm is black-owned and holds a level 2 B-BBEE rating. According to its leadership team, 51% of the investment manager is black-owned, with 39% black women ownership .
Key partners managing the firm include Brett Commaille (partner and co-founder), Mathew Palin (partner), Nkateko Khoza and Eugene van Rensburg . Commaille and Palin both have roots in Angelhub Ventures, giving them experience dating back to the early days of South Africa’s angel investing scene .
Portfolio strategy and past investments
Beyond the three new HVF II investments, Hlayisani’s broader portfolio offers insight into its approach. Previous investments captured in deal databases include edtech platforms Snapplify and d6 Group (which develops school management software), wireless internet provider Ikeja, employee engagement platform Wyzetalk, and mobility platform GoMetro .
The firm typically seeks significant minority stakes in companies requiring equity investments of between R10m and R100m ($600K — $6M), targeting businesses with strong revenue growth and clear exit potential .
The launch of HVF II comes amid signs that South Africa’s venture ecosystem is maturing. The SAVCA surveys indicate that private equity assets under management now exceed R233bn ($14.6 billion USD), while the venture capital industry has shown resilience despite global economic uncertainty .
There is also evidence of growing international interest. According to SAVCA, non-South African deal activity rose to 14.6% in 2024, the highest recorded level, reflecting the expansion ambitions of local startups and the involvement of foreign co-investors .
For Hlayisani, the thesis is straightforward: back local companies with global potential. “South Africa continues to produce globally competitive technology businesses,” the firm notes, “and HVF II exists to ensure they have the capital, opportunity, and long-term partners required to win on the international stage.”