CAPE TOWN: Secha Capital, an early-stage operations-focused private equity fund, on Monday announced that the first close of its second fund (Secha Capital Fund II) would invest up to R12 million into established southern African small businesses for significant minority equity stakes.
Announcing a R400m fund, Secha Capital said it aimed to not only invest in small and medium enterprises (SMEs), but also offer on-the-ground operational support to accelerate growth. Complementing growth capital with human capital, the impact investment model aims to solve key pain points and accelerate growth in the small business sector.
Small businesses in the country face significant barriers to growth, such as limited access to funding and resources, ineffective supply chain procedures and unfamiliarity with new technology.
SMEs contribute 66 percent to economy-wide employment, according to a study by the Small Enterprise Development Agency (Seda). Despite this, many South African SMEs are unable to recruit young, top achieving talent, cannot afford management support and are excluded from key-value chain relationships.
Secha Capital co-founder and managing director Rushil Vallabh said the first fund was always proof of concept.