South Africa's Naspers has committed R6 billion (approximately $415 million) towards funding technology startups in the country over the next three years. According to the Internet and entertainment investment group, the funding will be split in two ways: first is an amount of R4,6 billion which Naspers will use over the next 3 years towards investing in South Africa's technology sector, and then there is an amount of R1,4 billion which the company will use to setup Naspers Foundry - a fund that will invest in South African technology companies starting in 2019.
This was all announced during the inaugural South Africa Investment Conference 2018 which took place in Johannesburg on 26 October 2018.
“Technology innovation is transforming the world. The Naspers Foundry aims to both encourage and back South African entrepreneurs to create businesses which ensure South Africa benefits from this technology innovation,” said Bob van Dijk, Chief Executive at Naspers.
Investing in South African startups
Naspers has previously invested mainly in e-commerce type startups in South Africa. Previously, in April 2017, it invested $69 million into Takealot. The technology investment company also acquired Autotrader which it merged with its other e-commerce business, OLX. Added to that, they have made significant investments in non-South African technology startups, with a recent and most notable one being an investment of $775 million into Delivery Hero.
“We believe the best ideas often start locally, with passionate entrepreneurs starting businesses that meet the needs of the communities they know best. And when those needs are universal across the markets we know well, with the right backing, there is the future potential for their businesses to grow beyond their home market,” said van Dijk.
White Monopoly Capital
The announcement by Naspers came at a time when there had been an unofficial investment strike by some of South Africa's biggest businesses. This saw the companies holding onto capital and mostly not investing it back in the country to stimulate the economy.
One of the reasons given by the companies for not investing in South Africa was that the country had an uncertain political climate and that they were antagonized by being labeled as White Monopoly Capital, a phrase which President Cyril Ramaphosa urged South Africans to stop using.
During his closing remarks at the conference, President Ramaphosa said the breadth of case studies presented on the performance of current investments and the range of announcements relating to new and expanded investments affirmed that South Africa was a diversified economy that presented great opportunities.
"We have reminded our local investors, and also the global community, of the compelling reasons to direct resources into this economy.In coming to this milestone, we have also enabled government to think deeply about the impediments to investment – and to address them.Our investment envoys have brought us tough and frank feedback.As we track the investment pipeline and continue to build our dynamic portfolio of opportunities, we will sharpen our investment mobilisation tools.From this, we will emerge with renewed energy and revamped institutions that will drive us towards our objective of increased investment, inclusive growth and decent jobs," said President Ramaphosa in his closing remarks.
A total of R290 billion worth of investments was announced by various companies as their commitment to South Africa.
Cover image credit: South Africa Investment Conference.