VenFin launches tech fund

Johannesburg - Unlisted investment company, VenFin, today unveiled a new technology fund aimed at "early stage Intellectual Property (IP)" investments in the technology, media and bio-technology sectors.

Jannie Durand, InVenFin chairperson and CEO, said the fund - called InVenFin - was to provide "specialist funding and support to inventors at an early stage". He hoped it would develop inventors' intellectual property and eventually "corporatise" it.

Backed by R50m of VenFin's capital, InVenFin aims to provide early stage investment and ultimately provide "deal-flow" into the VenFin stable.

Joe Kieser, former chairperson of Enterprise IG has been appointed deputy chairperson and Brett Commaille is the CEO. Other notable heavyweights include former Nissan SA CEO John Newbury, Kees Schilperoort, Neville Williams of VenFin and Stuart Gast.

Over the last six months the fund has reviewed a number of opportunities, but to date has not had any investments.

Dearth of investments

When listed, VenFin was often criticised for not being able to identify sufficient suitable large investments, particularly after they committed to selling their Vodacom stake.

Last year, VenFin committed to a variety of investments. These included investment in Fundamo, a mobile payment platform, a R52m transaction with One Digital Media and a R50m stake in Dark Fibre Africa, a provider of fibre optic infrastructure.

Durrand said investment in start-ups would provide additional opportunities for the larger VenFin group as they matured.

Charl Norman, who has been nominated for the ICT Young Entrepreneur of Africa 2008, said the SA venture capital market was still immature and opportunities for return on investment were limited. At least one major international ICT firm had come to SA with the intention of investing in start-ups but failed to identify suitable areas to invest.

"South African investors are still trying to work out where to make money in start-up technology investments," said Norman.

Recent deals involving Naspers and Vodacom with tech start-ups Blueworld and Zoopy were a sign that large business in the media and communications space was growing in confidence to fund start-up ideas, he said.

There were opportunities in mobile and digital media but that opportunities in the web-space remain limited in the short term, he said.

Corrie Froehlich, an analyst at research company Frost & Sullivan, said that there would be sufficient opportunities for InVenFin. "We have a very innovative market and digital media is definitely taking off in SA," he said.

"We are likely to see more smaller and more manageable funds in these sectors." Froehlich said innovative technology players were coming out of Cape Town, particularly around mobile technology applications.

- Fin24.com