Grindstone Ventures, a female-led South African venture capital firm, has announced the launch of a ZAR 500 million fund, equivalent to approximately USD 31.3 million, to invest in technology-enabled African businesses from seed through Series A. The fund is led by Managing Partner Thandiwe Maqetuka and has been established in partnership with Knife Capital and Thinkroom. It is designed to address the funding gap between early commercial validation and the scale required to attract institutional investors.
Addressing the Seed to Series A Gap
The new fund targets businesses that have moved beyond early validation but still struggle to secure growth capital. Keet van Zyl, co-founder of Knife Capital, described the evolution from seed to Series A as one of the clearest gaps in the African venture ecosystem. While African technology funding strengthened in 2025, seed funding declined for a third consecutive year, leaving many promising businesses undercapitalised as they seek to scale.
Fund Structure and First Close
Grindstone Ventures is targeting a first close of ZAR 150 million, around USD 9.4 million, and expects to build a portfolio of 15 to 20 companies. Investments will be primarily in South Africa, with selective opportunities elsewhere on the continent. The fund will take meaningful minority positions and provide follow-on capital to its strongest-performing companies, concentrating additional resources behind businesses that demonstrate clear momentum.
Track Record and Ecosystem Access
Grindstone Ventures Fund I backed seven companies, including Locstat, Welo and AgriLogiQ, several of which subsequently raised further equity from international investors. The new fund benefits from the wider Grindstone ecosystem, which screens more than 1,000 businesses annually. Around 50 startups participate in accelerator programmes each year, providing a strong pipeline of high-potential opportunities.
Active Portfolio Support
Portfolio companies will receive hands-on support across strategy, governance, commercial growth, market access and exit readiness. The fund's partners bring experience in venture investment, entrepreneur development, acceleration and scaling technology businesses. It will concentrate additional capital behind companies that perform strongly, ensuring follow-on funding is available to the most promising teams.
Exits as a Core Discipline
Grindstone Ventures is placing a strong emphasis on generating returns through exits rather than relying on paper valuations. Maqetuka said the fund is designed to diversify at entry, allow performance to emerge and then concentrate capital behind the strongest performers. The firm is also finalising an exit from its first fund that will return capital to investors, reinforcing its focus on liquidity.
Expanding Inclusion in Venture Capital
The fund aims for at least 50 percent of its portfolio companies to be black-owned while pursuing gender-balanced representation among female founders and women in leadership. Maqetuka said investors should not have to choose between financial performance and building a more inclusive investment ecosystem. The fund follows its first vehicle, which helped catalyse further seed investment from South African funders and backed companies that subsequently raised international equity.
The launch of this fund marks a significant effort to strengthen Africa's venture capital pipeline at a critical stage of company growth. By pairing capital with active operational support and a clear focus on exits, Grindstone Ventures aims to help promising startups become institutional-grade businesses. Its inclusion targets also reflect a broader ambition to widen access to venture funding while pursuing competitive financial returns.