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Local venture capital firm E Squared Investments says it invested more than R300m in local start-ups in 2025. Risk appetite for early-stage start-ups in South Africa has tended to be low and funders typically shy away from putting money into ideas or getting businesses off the ground unlike the US, which has made large and sometimes risky bets on unproven business models.Since its inception in 2017, the Allan Gray-backed firm has deployed R1.34bn to 227 ventures across Africa. That includes R316m backing “responsible entrepreneurs, supporting portfolio resilience and contributing to economic inclusion through a long-term investment model”, the firm said in a report. The firm describes itself as a “South African impact investor that provides funding and end-to-end business support to high-growth businesses”. It owns just less than 18% of Allan Gray Proprietary, benefiting from dividends from Allan Gray, which are used as a source of capital for its investment activities. Over the years, E Squared has backed a number of local technology-based start-ups such as agriculture firms Khula! and SwiftVEE, as well as Synatic, a data integration and automation company, and financial literacy platform Fintr. In 2024, E Squared disbursed R369.7m through its investment activities, from pre-seed to growth stage. The firm has backed founders tackling poverty, unemployment and inequality with bold, scalable solutions. These ventures have collectively created, supported or sustained more than 32,000 jobs. According to the Southern African Venture Capital and Private Equity Association (Savca) capital flow to South African start-ups in 2024 reached R3.29bn, driven by investment into local technology and health businesses. E Squared CEO Gladwyn Leeuw said the report reflects the practical demands of supporting entrepreneurs through uncertainty.“Entrepreneurs continue to build in an environment where capital remains scarce and the margin for error is limited. That reality reinforces the importance of patient, long-term support,” Leeuw said.“Our focus is on helping founders build sustainable businesses that can keep trading through difficult cycles, grow into the demands of scale and widen access to opportunity.”E Squared’s investment highlights for 2025 include R160m allocated to high-growth and scalable ventures, R10m for seed to Series A+ ventures, R32m in pre-seed capital and R36m for social enterprises. Of the total, 92% of investment value was directed to black beneficiaries while 62% supported black-women-owned businesses. Our responsibility is to support responsible entrepreneurs with purpose and discipline while strengthening the systems needed to advance this mandate over the long term.— E SquaredIn capital raising, seed funding denotes the first official investment for a start-up, usually provided by private investors for a share of equity in the business. Once done, a start-up moves to the series A stage, having achieved a number of milestones, making it ready for the first stage of venture capital investment. The firm said it has realised R137m in investment returns, including R31m in 2025 alone through partial exits. Its venture portfolio’s fair market value rose 16% year on year to R987m, translating into a 44% return on capital.“Financial performance and social impact are mutually reinforcing,” said Leeuw. “Businesses that are financially sustainable are better positioned to create jobs, serve customers, support suppliers and contribute to stronger communities.“Our responsibility is to support responsible entrepreneurs with purpose and discipline while strengthening the systems needed to advance this mandate over the long term.”The report also notes that 42 ventures in E Squared’s ecosystem have surpassed R2m in revenue and four businesses have pushed past R400m in revenue or R2bn in market value. The firm said it is focused on “strengthening its pipeline, deepening post-investment value creation, improving measurement and building partnerships that support responsible capital, capability and opportunity in South Africa’s entrepreneurial ecosystem”.Correction: July 3 2026An earlier version of this article stated that E Squared had invested R1.37bn since inception. The correct amount is R1.34bn. Business Day
