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In due course, 4Di Capital SA plans to raise third venture fund

In “due course,” South African early-stage venture capital firm 4Di Capital plans to raise its third venture fund in order to invest in seed to Series A companies throughout the continent.

Based in Cape Town, South Africa, 4Di Capital is an early-stage venture capital fund manager that specializes in the Southern and Eastern African markets. Formally established in 2009, 4Di is one of the most well-known and respected brands in the local venture capital market, led by a group of entrepreneurs with firsthand experience of building businesses.

The business has made investments in South African startups Snapt, LifeQ, Sensor Networks, Aerobotics, Lumkani, Zoona, InvestSure, and Tagmarshal. It has also expanded into East Africa by funding Kenyan businesses Wasoko and Flare.

2011 saw 4Di raise its first angel fund, and in 2016 it launched its first venture fund. 2019 saw the launch of its second venture fund, which was led by the SA SME Fund.

“We’ve been investing out of that fund since that time – part South Africa, part rest of Africa – and really honing our focus on being the early-stage entrepreneurial guys,” Justin Stanford, 4Di’s co-founding general partner, told media.

“We are there to probably be your first institutional check, or be a part of that, possibly leading the round, but very much being in the founder’s corner and always being there as someone to lean on, someone to advise, someone to act as a tiebreaker or a marriage counselor. Whatever is needed.”

With ten investments under its belt, the second venture fund is almost finished. Stanford said that one or two more could still be made.

“Then we’ll shortly be looking at the possibility of perhaps raising our next venture fund in due course,” he said.

Given the global “funding winter,” 4Di, which counts family offices, corporations, and organizations such as the SA SME Fund among its LPs, would be raising a fund at a difficult time. However, according to Stanford, entering the capital market is easier now than it was about a year ago.

“There are a lot of signs that the market is starting to open up again. We’re not expecting it to be easy, and we’re not putting pressure on ourselves to get immediate results. We are quite aware that there might still be a warming-up period to come, so we’re allowing ourselves plenty of time,” he said.

“We’re going to just put a toe out there, and just see and get a sense of what the appetite is like. We are going to be doing a bit more overseas fundraising, as it seems the African model is now becoming a bit more accepted, and a bit more something that overseas investors are interested in, whereas in the past it was more local sources that we would tap.”

 

 

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