Knife Capital

Knife Capital is a company that invests in new and growing businesses. It was established in 2010 as the South African branch of Here Be Dragons (HBD), which is a privately owned group that invests in emerging markets.

The company took over the management of seven HBD portfolio companies to create a managed fund. Over the years, Knife Capital has successfully exited several companies, including CSense, Fundamo, and orderTalk, to various industry giants.

Going beyond funding to achieve scale and success

Since its inception in 2010, Knife Capital has been an active player in the South African venture capital ecosystem. The firm focuses on investing in and supporting early-stage technology-enabled companies with high growth potential. They provide not only funding but also access to their network, expertise, and experience to help their portfolio companies scale and succeed.

Knife Capital has been instrumental in supporting the growth of the South African startup ecosystem.

Through their various funds, they have invested in a range of innovative and disruptive companies, from software and fintech to healthtech and education. The firm is known for its rigorous due diligence process and its commitment to backing companies with a strong team, well defined value proposition, and sustainable business model.

Knife Capital’s Grindstone Accelerator program and Knife's Fund II

Knife Capital initiated the Grindstone Accelerator program in 2013 with the aim of assisting South African tech startups that have demonstrated traction in building a foundation for growth, increasing their investability, sustainability, and marketability.

In 2016, Knife Capital started KNF Ventures, which is its Fund II and a Section 12J Venture Capital Company. The company established this new venture to employ its knowledge, networks, and funding to speed up the growth of innovation-driven SMEs in South Africa and produce better returns for investors.

The launch of Knife Fund III

Knife Capital made several significant moves in subsequent years, such as bringing on board the Draper-Gain Family Office as a strategic investor, expanding its operations to the UK to help portfolio companies grow globally, and launching Knife Fund III in 2021. This new $50 million fund is focused on investing in South African companies that have achieved product/market fit and are poised for significant growth, addressing a crucial need for follow-on funding in the country.

Knife Capital is a venture capital firm that focuses on high-growth B2B innovative technology companies with strong intellectual property and potential for global expansion.

The firm's investment approach includes a broad sector focus that includes enterprise technology, hardware and deep tech, healthcare, educational and financial technology. They provide funding and strategic support to these businesses to help them grow and succeed.

Knife Capital also helps their portfolio companies with market access, strategic planning, financial management, and other areas critical to business success.

Typical venture capital investments

With a typical investment ranging from $600k to $8m, Knife Capital invests in South African companies, although it considers Sub-Saharan Africa as well.

To qualify for Knife Capital's investment, companies must meet certain criteria, including having a well-defined product with recurring revenues, addressing a distinct pain point of their customers, addressing a sizable market, having impressive management teams, achieving high gross margins, and having a set governance process in place.

Ensuring success: Knife Capitals; value chain approach

Knife Capital stands out in its industry for its unique value chain approach towards supporting the growth, investment, and exit of businesses. This approach involves providing proactive value-add creation at every stage of a business's development, from identifying promising entrepreneurs to offering strategic guidance and mentorship, all the way to achieving a successful exit.

In addition to its comprehensive value chain approach, Knife Capital is dedicated to supporting the growth of technology-enabled SMEs. This is achieved through its Grindstone Accelerator program, which helps to build high-growth SMEs in the technology sector. The company also plays a critical role in supporting the local entrepreneurial ecosystem through its educational and enterprise development initiatives.

By combining the specialized knowledge of entrepreneurs with the business development expertise of Knife Capital and the diverse experience of credible investors, investees acquire a strong knowledge base to facilitate their scaling process.

Knife Capital's investment focus is on companies that show potential for international success with a deep technological competence. The firm's investment approach is backed by a value chain philosophy that helps businesses to grow and succeed.

Through its Grindstone Accelerator and education and enterprise development initiatives, Knife Capital is playing a critical role in building a strong entrepreneurial ecosystem in South Africa and Sub-Saharan Africa.