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German agency to provide R2m funding to SA start-ups

Staff Writer
By Staff Writer
Johannesburg, 04 Jun 2024
GIZ says local start-ups can receive a grant of up to €100 000 towards a growth investment.
GIZ says local start-ups can receive a grant of up to €100 000 towards a growth investment.

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), on behalf of the German Federal Ministry for Economic Cooperation and Development, has launched develoPPP Ventures – a new funding scheme for start-ups in South Africa.

The programme supports the growth phase of innovative South African small and growing businesses (SGBs) that have the potential to generate a measurable, positive social or environmental impact alongside financial returns.

GIZ has worked in South Africa since 1994 and opened its offices in 1996. The country office is also responsible for operations in Lesotho and Eswatini.

In a statement, GIZ says the funding is decided within the framework of regular competitions (in 2024 it takes place twice).

It notes that if the application is successful, start-ups can receive a grant of up to €100 000 (R2 million) towards a growth investment to scale up their development-relevant business model.

Prerequisites are that the start-ups already generate initial revenues with their product or service and acquire additional funds from other sources of at least the same amount via a matching fund model.

According to GIZ, develoPPP Ventures financing is tailored to raise these companies above the first threshold of becoming attractive enough for commercial (impact) investors and/or financial institutions.

It notes the SGB must be registered in South Africa, must have a relevant product or service already on the market and prove first sales figures by providing at least one annual financial statement.

In addition, they must provide sound financial and strategic business planning documents over three years going forward. The financial planning should provide insight into how the funds will be used to grow, become financially sound and reach break-even, it adds.

Besides funding, the companies will receive technical assistance based on their specific needs to maximise their chances of success, GIZ notes.

GIZ is supported by the international start-up ecosystem-building organisation VC4A and local community-driven angel investment group Jozi Angels, to implement develoPPP Ventures in South Africa.