Secha Capital Raises R300 Million From Blue-Chip Investors

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Secha Capital Raises R300 Million From Blue-Chip Investors
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Secha Capital today announced a first close of its second fund, with R300 million in investments from blue-chip investors. RMB Ventures, 27four Investment Managers, The SA SME Fund and Caleo Capital.

Founders of Sechaba Capital are Nombuso Nkambule, Brendan Mullen and Rushil Vallabh who started Secha Capital in 2017.

This first close of the R650 million fund enables the team to deploy its unique Operator-Investor model. The fund invests in traditional companies across sectors in Southern Africa that are making the tech-enabled transition into the green economy.

“We invest in companies at an inflection point in their growth trajectory. Most capital in Southern Africa is invested in either extremes — early-stage start-ups or mature companies. We’ve identified a gap in the market where we can find unique proprietary pipeline and bring in our team of Operator-Investors to achieve outsized returns”, explained Vallabh.

Secha’s Operator-Investor model places highly skilled human capital resources into Secha’s portfolio companies to work on high impact value creation projects that deliver exponential growth for its entrepreneurs.

“We are a young and diverse team. We bring operating expertise to ‘heartbeat-of-the-economy’ growth stage companies via our strategy consulting, finance and entrepreneurial backgrounds,” added Mullen.

We believe that our Operator-Investor model will re-imagine African investing and we are proud to have the support of some the greatest investors on the continent to do so.”

Secha’s first fund proved that the combination of equity investments and human capital for growth stage businesses is a replicable model for generating financial returns and social impact, particularly in women-founded businesses in South Africa.

Secha Capital Fund II will follow a similar mandate and has already made four investments—iG3N, Cultura Fresh, Herbivore and FarmTrace.

Brian Waweru of RMB Ventures says: “We are impressed with Secha’s thesis-driven, growth stage investment strategy. By investing in this gap in the market, it is a win for the entire Southern Africa PE and VC ecosystem. Our investment in Secha is consistent with our strategy to explore alternative models to stimulate economic growth in South Africa. We are proud to support Secha’s ongoing success.”

As a subsidiary of FirstRand Limited, the largest financial services group in Africa by market capitalisation, RMB Ventures is an on-balance sheet provider of private equity capital and has invested in over 40 transactions since the mid-1990s. The current portfolio consists of over 18 direct investments, plus a number of fund investments with market value in excess of R8 billion.

The fund plans to make ten more investments within the next five years.

Ridwaan Kajee of 27four Investment Managers shared: “Secha’s Operator-Investor value-add model is the first of its kind. We believe that this is an inherent organisational strength that will deliver financial and impact returns. Secha has demonstrated that the model works and is replicable and we’re proud to therefore back this team to scale the model and showcase a new approach to investing in Africa.”

27four is a diversified global financial services group which invests money innovatively, helps pension funds make the right decisions and supports small independent asset managers.

Secha expects Fund II’s final close in September 2024.

Claudia Manning of The SA SME Fund concluded: “We were impressed by Secha’s track record of job creation, transformation, growth and exits. We invested in them so that they can continue what they do with more companies, more people and at a greater scale.”

The SA SME Fund’s recently established Venture Capital Fund of Funds (VCFoF) focuses on later stage VC funds in South Africa. Alongside seeking superior risk-adjusted returns, the VCFoF is committed to transformation and impact.

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