Edge Growth has created the Edge Impact Fund (EIF), with a first closure of R350 million (US$21.9 million), targeting at tech-enabled enterprises seeking growth funding without giving up further equity.
The fund took over three years to put together. Two South African financial institutions anchored it, which is more important than the headline number. Edge Growth’s previous vehicles relied on corporate enterprise and supplier development (ESD) funds, but this one attracted institutional investors instead. Janice Johnston, CEO of Edge Growth Ventures, refers to the move as a real milestone.
Edge Growth Ventures, the firm’s impact investing arm, oversees the fund. It will issue cheques in South Africa and select markets across the continent.
Who qualifies:
- Companies in the growth stage, often between Series A and Series C.
- The minimum annual salary is R20 million (US$1.2 million).
- A tried and true model that generates consistent cash flow.
- Fintech, healthcare, education, and green technologies
- A plausible plan for scaling operations that will have measurable results.
Ticket prices range from R20 to R60 million.
What it offers:
Term loans and working capital. Venture debt and convertible loans. Revenue-based finance calculates payback based on what the company actually collects each month, as opposed to a fixed plan that ignores seasonality.
Edge Growth established South Africa’s first dedicated venture loan fund in 2022, thus this is a continuation rather than a first attempt. Noluvo Nela, Fund Head, describes the EIF as fit-for-purpose finance for companies that lie somewhere between a bank’s risk appetite and a venture capitalist’s ownership aim.
The ultimate goal is to raise R750 million (US$46.8 million) by December 2027. This would about quadruple the pool.
