The Cape Town, South Africa-based venture capital firm 4Di Capital is getting ready to open its third venture fund, which will support promising entrepreneurs in Africa from seed to Series A. Since its founding in 2009, 4Di Capital has grown to be a well-known brand in the venture capital industry, especially in Africa’s eastern and southern regions. The company is renowned for having a group of entrepreneurial leaders that have personal knowledge of growing businesses.
Significant investments have been made by 4Di Capital in a number of South African firms over the years, including Lumkani, InvestSure, Aerobotics, Snapt, LifeQ, Sensor Networks, and Tagmarshal. Through its investments in Kenyan businesses like Wasoko and Flare, the company has also increased its presence in East Africa.
The first official venture fund for the venture capital firm was introduced in 2016, after its initial angel fund was introduced in 2011. The SA SME Fund provided significant funding for the second venture fund, which was launched in 2019. Sharpening 4Di’s focus on early-stage ventures, this fund has been aggressively investing in a variety of South African and other African firms.
In an interview with Disrupt Podcast, Justin Stanford, a general partner at 4Di and co-founder, offered insights into the company’s methodology. He highlighted 4Di’s function as an early-stage investor, frequently giving firms their first institutional funding and serving as a helpful counselor and negotiator for the founders.
After supporting ten firms, the second venture fund is almost at capacity for investments, but Stanford indicated that one or two more investments might be made before the fund is fully committed. In the future, 4Di Capital is considering when to raise its next venture fund. Stanford notes that the fundraising environment has improved slightly from the previous year, despite the present worldwide “funding winter” negatively impacting the investment climate. While acknowledging the difficulties, he voiced optimism for the market’s gradual reopening.
As interest in the African investment model grows among international investors, 4Di Capital intends to investigate further overseas fundraising prospects. The company used to rely mostly on domestic funding, but it is now seeing an increase in interest from foreign investors. tanford believes that 4Di’s established reputation and successful track record with the 2016 and 2019 funds, which showcase strong performance and notable portfolio companies, will be attractive to potential Limited Partners (LPs). The firm’s history of fostering successful ventures is expected to aid in its fundraising efforts for the upcoming third venture fund.
