Kalon Venture Partners, a South African venture capital firm that invests in digital disruptive technologies, is raising a US$50 million fund that will allow it to make investments outside of South Africa for the first time.
Kalon Venture Partners, which was founded in 2016, invests in post-revenue startups with high growth and impact potential. To date, the firm has backed 11 South African technology companies, including marketing startup Mobiz, payments company Ozow, prop-tech company Flow, and cybersecurity startup Sendmarc.
Its most recent fund, ZAR250 million (then $17.5 million), was closed in 2021. It began as a Section 12J company, encouraging South African taxpayers to invest in local businesses in exchange for a tax deduction of up to 100%. It will be centered on Africa.
“That will be our foray into African venture capital,” Clive Butkow, the CEO of Kalon Venture Partners, said.
“We are not naive, we don’t believe for one second we’re just doing to drop our company into a new market and it is going to work. We are definitely looking at hiring people in those markets, so we’ve got feet on the streets and boots on the ground. We don’t believe for one second South Africans can go and run a Nigerian business or a Kenyan business. We’ve just seen too much failure when you try to make that happen.”
Operating across Africa, rather than just in South Africa, would present Kalon with both challenges and opportunities, which Butkow acknowledged.
“We are not naive, we don’t believe for one second we’re just doing to drop our company into a new market and it is going to work. We are definitely looking at hiring people in those markets, so we’ve got feet on the streets and boots on the ground. We don’t believe for one second South Africans can go and run a Nigerian business or a Kenyan business. We’ve just seen too much failure when you try to make that happen.”
