Vumela Fund
- Venture Capital up to R2,000,000
- Low-interest up to 5%
- Repayment up to 3 years
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- Vumela Fund venture capital product
- Vumela Fund contact details
[Accessed July 27, 2023]
About Vumela Fund
In 2009, FNB business banking and Edge Growth established Vumela as an investment company to finance small, medium, and micro-sized enterprises with the primary goal of generating employment and reducing poverty in South Africa. These are companies with strong economic and social returns.
During its initial four years, Vumela invested R90 million in eight high-growth SMEs. Vumela's second fund, launched in 2015, received R100 million from FirstRand and R127 million from the Jobs Fund.
Vumela's non-financial support and access to markets for SMEs
Apart from providing financial aid, Vumela provides non-financial assistance to support growth, such as participation in their 10X-e accelerator program for scaling up.
As a majority black-owned firm, any equity that Vumela acquires will be viewed as black equity. They also assist in obtaining market access by establishing supplier development partnerships with several major South African corporations.
Vumela: Experienced team and funding for black-owned businesses
Vumela's team brings a wealth of experience in entrepreneurship, finance, banking, business strategy, innovation, and social impact investment.
Super coaches who are seasoned entrepreneurial/scale-up leaders are also available to assist. Businesses that operate in any corporate supply chain and have a turnover of less than R50m, with majority black ownership, are eligible to apply for funding.
In addition to financial backing, businesses funded by Vumela will gain access to a valuable network and experience empowerment.
Vumela Fund Services
One of Vumela's funding options is venture debt, a short-to-medium-term debt provided to companies that have gone through one or more rounds of venture capital equity funding.
The investment size for venture debt is R150 million and it is recyclable. The payment of interest is mandatory, and for the default risk, providers get warrants on the company's common shares in return.
Venture debt provides a way for entrepreneurs to reduce the reduction of ownership by shareholders in the initial phases of their business development, and it also allows for an elongation of the amount of time a company has until the next round of funding is needed, thereby enabling companies to reach their performance objectives.
Vumela's accelerate loan: Funding solution for early-stage black-owned businesses
Vumela's Accelerate Loan is an additional financing option for seed/early-stage companies that are black-owned and involved in any supply chain.
This loan is accessible quickly, and for phase 1, Vumela will only fund businesses on programs managed by Edge Growth and FNB. The investment amount for the Accelerate Loan is R50 million, and it is renewable.
To be eligible, businesses must have revenue exceeding R1 million but less than R50 million per annum and must be participating in an FNB-sponsored Enterprise and Supplier Development program or one managed by Edge Growth.
The loan amount ranges from R100,000 to R2 million, with a loan term of three months to three years. The interest rate is 5%, but it can be lowered to 0% if the loan terms are entirely adhered to.
Vumela's 4th Fund: Opportunities for Black-owned SMEs in corporate supply chains
Vumela is currently developing its 4th Fund, which focuses on businesses that are majority black-owned, have a turnover of less than R50 million, and operate within any corporate supply chain. Although the fund is not yet available, Vumela is accepting expressions of interest for its ESD programs.
The FNB Advancer Program is among the available programs for black-owned B2B SMEs in various sectors. Another program, the Growth Transformer Program, employs gamification, peer engagement, and digital learning to encourage SMEs to develop habits that unlock their businesses' growth potential.
Vumela Fund – Venture Capital
- Loan Type Venture Capital
- Interest Rate up to 5%
- Loan Amount up to R2,000,000
- Repayment 3 months to 3 years
Benefits of Vumela Fund
- Vumela Fund offers financial support to SMEs.
- It reduces shareholder dilution for businesses.
- The Accelerate Loan provides flexible terms.
- Access to a valuable business network is available.
- Vumela provides non-financial support, including accelerator programs.
- Equity acquisitions by Vumela promote black ownership.
- The fund helps SMEs access major South African markets.
- A diverse portfolio offers various investment opportunities.
- Enterprise and Supplier Development programs are offered.
- Vumela is developing its 4th Fund for future opportunities.
- Eligibility criteria include black ownership and turnover.
- Team has expertise in entrepreneurship and finance.
- The fund has a comprehensive privacy policy.
- Aims to reduce poverty and create jobs.
Venture debt application requirements]
Business owners are required to have several documents and information ready when applying for funding. These include:
- Purchase order documents
- Supplier quotations/proforma
- Company financials
- Employee information
Additionally, business owners need to provide a valid BEE certificate or affidavit stating that their business is a qualifying or exempt micro-enterprise.
Eligibility criteria for venture debt funding in South Africa
Entrepreneurs who conduct business in the primary agri, mining, property, or gambling sectors are not eligible for funding. Tobacco and alcohol-related businesses are also not considered.
However, those in the fields of clean and renewable energy, chemical recovery, sustainable agriculture or other environmental fields may be eligible for funding. Business owners with a level of black ownership greater than or equal to 51% and seeking venture debt funding between R1m and R30m can apply.
To apply for venture debt funding from the Vumela Fund, business owners must provide several details, such as their company name, contact information, level of black ownership, BEE certificate or affidavit, establishment date, headquarters location, turnover and net profit before tax, stage of the business, the intended use of capital, BBBEE level, percentage of black female ownership, information regarding previous venture capital investments, and how they became aware of ProfitShare Partners. They must also provide a brief service offering and value proposition in one sentence.
Vumela's alternative funding solutions and ESD programs for start-ups
Vumela provides unconventional financing alternatives like venture debt, accelerate loans, and their upcoming fourth fund for startups.
These financing options are specifically designed to aid companies in reaching their growth objectives while limiting shareholder dilution and providing the flexibility to prolong their cash runway. To qualify for these funding solutions, businesses must meet specific requirements, such as having a turnover of less than R50 million and being majority black-owned.
Furthermore, Vumela partners with Edge Growth and FNB to provide Enterprise and Supplier Development programs such as the FNB Advancer Program and Growth Transformer Program to help black-owned B2B SMEs in various industries and commodities achieve their growth goals.
Vumela Fund Contact
Physical Address
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Opening Hours
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