KNIFE CAPITAL

IS A SOUTH AFRICAN VENTURE CAPITAL INVESTMENT FIRM FOCUSING ON INNOVATION-DRIVEN VENTURES WITH PROVEN TRACTION

INNOVATIONS

OF THE WORLD

FOR TODAY'S BIG THINKERS

Established in 2010 as the incarnation of the South African venture capital division of ‘Here Be Dragons’ – a privately owned emerging market investment group founded by internet entrepreneur and cosmonaut Mark Shuttleworth.

By leveraging knowledge, networks & funding, Knife Capital accelerates the international expansion of entrepreneurial businesses that achieved a product/market fit in at least one beachhead market.

Eben van Heerden and Keet van Zyl were the Investment Managers at HBD and formed Knife Capital to take over the management of the HBD VC portfolio. Andrea Bohmert joined shortly after and as the business evolved, Peter Gain, Davey Gant and Julien Draper augmented the partnership. Under Knife Capital’s management, the Fund yielded impressive returns in a fully exited fund portfolio, proving that Venture Capital in Africa can work.

Knife Capital has a deep understanding and proven track record with early-stage technology investments in South Africa. Apart from facilitating and managing various private equity transactions and angel investment rounds, Knife Capital is managing various VC funds across funding stages.

With offices in Cape Town, London and Jersey, Knife Capital is well entrenched in the ecosystem and pioneered many of the initiatives that have shaped the industry.

Knife Capital’s distinct competitive advantage lies in its value chain approach to development, milestone-based investment, growth and exit of businesses. This is embodied in the firm’s FIND MAKE GROW REALISE philosophy.

Knife Capital has an active value-add approach, from finding growth entrepreneurs to business mentorship to providing strategic growth input through to exit-centric business building, and has the following key attributes:
• Experience across the investment cycle in Africa.
• Focus on innovation-driven ventures with proven traction.
• Active value-add providing financial management support, legal guidance, active business development through introductions, brand building and strategic inputs.
• Assistance with finding additional co-investors for subsequent funding rounds.
• Exit-centric business building.
• Established processes and partners.
• Credible investor base, including successful exit entrepreneurs.
• International affiliates.

But investing in early-stage businesses is relatively easy compared to unlocking value and making a return on those investments through profitable exits…

While the venture capital (VC) space is gaining more and more momentum in Africa, the process of exiting these investments remains a challenge. What many investors and entrepreneurs don’t realise is that positioning a business for a successful exit already starts in the due diligence process – even before investment. Exit strategies will most likely influence the investment term sheet and govern the relationship between the entrepreneur and investor. It is therefore critical to align interests between them.

Knife Capital has a proven track record of exit-centric business building. Some Knife Capital exits were to the likes of Visa, General Electric, Garmin, Uber and Softbank.

PRODUCT INNOVATION – GRINDSTONE VENTURES
Knife Capital also builds high-growth technology enabled SMEs through its Grindstone Accelerator (launched in 2014 as an entrepreneurship development programme to assist scale-up businesses to become sustainable and funding ready) and fills critical gaps in the local entrepreneurial ecosystem through education and enterprise development initiatives. In 2021 the team launched Grindstone Ventures – a women-led Seed fund to invest behind Grindstone companies.

The Knife Capital team members have been at the forefront of driving the South African early-stage investment ecosystem for the last 15 years. This includes establishing venture capital funds (HBD, Hasso Plattner Ventures Africa, KNF), the development of South Africa’s first formalised angel investment group (Angelhub), widespread entrepreneurial education initiatives and mentorship, business incubation and acceleration (Grindstone Accelerator, the first structured South African programme focused on scale-ups), influencing policy through involvement in investment promotion organisations (Silicon Cape, SiMODiSA, Wesgro, SAVCA) as well as developing widespread local and international networks to facilitate business growth and exits.

PURPOSE LED APPROACH
Knife Capital’s purpose is to give legitimacy to Venture Capital in Africa as a recognised alternative asset class. This can only be done through sustained commercial success stories in this space. If successful, the multiplier effect on innovation, job creation and economic growth on the continent will be immense.

The Knife Capital Team’s investment philosophy is predicated upon the thesis that innovation-driven entrepreneurs from Africa with world-beating innovations are under-funded to compete on the global
stage. Therefore, Knife Capital’s strongest investment interest is in companies which, through technology and innovative knowledge management, seem capable of turning African solutions into successful global businesses.

Knife Capital also runs a world class MBA internship programme with leading business schools such as Stanford and Harvard to gain knowledge but also build additional networks with top business leaders worldwide.

Knife Capital will continue to be the catalyst for the creation of an entrepreneurial ecosystem with a direct impact on innovation, job creation and growth.

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