Funding overview for tech startups
Note: We do not provide services relating to funding.
There are many sources of funding available to inventors. We summarize our favorites below:
| Funder | Funding stage | Requirements | Limit |
|---|---|---|---|
| SPII, Product Process Development Scheme and Matching Scheme
DISCONTINUED |
Prototype development | Non-repayable grant reimbursing between 50% and 85% of “qualifying costs” incurred
Development and subsequent production must occur in South Africa SPII application must be accompanied by valid tax clearance certificate Approval process takes between 3 and 5 months For more information visit our SPII page We really like, and strongly recommend these guys! |
Up to R1 million for small companies and R3 million for small, medium or large companies |
| Angelhub | Early stage | Focuses on financial services, gaming, internet/web services, IT services, media & entertainment, mobile, software and telecommunications
Costs R500 to have your application evaluated and listed on Angelhub’s website where the applicant is introduced to potential angel investors Application process typically takes 1 to 3 months |
R1million to R10million |
| Technology Innovation Agency (TIA), Idea Development Fund | Early stage | Provides funding to entrepreneurs and small companies to: assist with patenting costs; technologies incubation at TIA’s platforms; and/or development of a fundable proposal / business plan
South African registered companies, publicly funded research organization, Higher Educational Institutions and individuals / entreprenuers can apply. However, funding will only be released to a registered company and, in certain instances, directly to the service provider Applicants must complete the TIA online Funding Applications template Approval process can take 3.5 months |
Maximum of R200,000 per transaction, except for intellectual property registrations and renewal costs, where the allowable maximum is R500,000 per transaction
Applicants are expected to make a financial contribution |
| Small Enterprise Development Agency (SEDA), Product Testing Grant | Post prototype | Submit an application accompanied by a valid tax clearance certificate and a quote from SABS for product testing
Approval process takes 2 to 3 weeks |
Up to R60,000 for SABS product testing paid directly to SABS |
| 4DI Capital | Very early /seed stage | Technology venture capital fund manager
Primary focus area: mobile proprietary owned software with potential in Africa and global markets Applicants complete an online proposal form. This may be followed by a face-to-face meeting Approval process typically takes 3 months |
Up to R3 million in return for up to 30% equity interest |
| Invenfin venture capital | Post proof-of-concept where there is a working prototype or beta tested software at minimum | Focus: differentiated products or businesses with a sustainable competitive advantage and international potential
Approval process typically takes 6 months We really like, and strongly recommend these guys! |
Average current investments size is R8 million in return for up to 49% equity |
| IDC (Venture Capital Fund) | Startup | Equity funding provided to startup technology-focused businesses. The IP must be “globally unique” and “science based”
Submit a business plan with financial budget Approval process could take one month from completion of a due diligence, but complex transactions (normally including equity investments) can take up to 4 months We really like, and strongly recommend these guys! |
Funding from R1 million to R15 million in return for an equity stage of between 25.1% and 49.9% |
| DTI, Export Marketing and Investment Assistance Scheme (EMIA) | Promoting product sales | Available to SA manufacturers and exporters who have traded for more than one financial year. Sole proprietors or partnerships may also apply
EMIA application must be accompanied by valid tax clearance certificate Approval process takes at least 2 months |
Individual exhibition participation including:
Return economy class airfares up to a maximum of R13,000; Maximum of 15 days subsistence allowance of R2,000 per day; Transport of samples costs limited to R17,500; and Exhibition fees up to a maximum of R45,000 |
| Khula Enterprise Finance, Khula Direct | Product in market, bridging finance for expansion / acquisition of fixed asset | Submit application form | Loan amounts range from R50,000 to R3 million. Repayment period depends on the product type, but may not exceed 5 years |
| GroFin | All stages of development | Provides finance across all sectors except for non-profit businesses, governmental organisations and businesses primarily involved in primary agriculture
Application process involves submission of an application form, business plan including 5 year cash flow forecast, copy of ID and CV Approval process takes 6 to 7 weeks |
Between R500,000 and R12 million in the form of a term loan. Base interest rate is 14%, but varies on a case by case basis. Term of the loan varies from 3 to 7 years. 30% unencumbered cash required |
| Business Partners | Focus: All sectors
Applicants: Companies with gross assets > R100m, annual turnover |
More than R500,000 and, in exceptional cases, may exceed R5m. Average repayment period is 5 years. Current average value per financing transaction is R1.8m | |
| Small Enterprise Development Agency (SEDA), Technology Transfer Fund | Post prototype | Non-repayable grant to business with turnover less than R5 million per annum (i.e. small companies) for specific technology
Approval process takes 6 to 12 months |
Up to R600,000 |