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South African venture capital firm Mamor Capital has raised R300 million ($18.8 million) in the first close of its inaugural fund, targeting technology companies that have moved beyond the idea stage and already have paying customers.
The black women-owned and managed investment firm is seeking to raise R550 million ($34.4 million) for the fund, with the Public Investment Corporation (PIC), South Africa’s largest asset manager, serving as the anchor investor.
Mamor plans to use the fund to back South African technology businesses that have demonstrated commercial demand but may still struggle to access sufficient capital to finance their next stage of growth.
The fund highlights a persistent gap in South Africa’s startup ecosystem, where businesses can have established products, paying customers and early revenue but remain too small or risky for traditional bank financing while facing limited access to follow-on venture capital.
Targeting post-revenue businesses
Mamokete Ramathe, founder and chief executive officer of Mamor Capital, said the firm spent more than three years raising its first fund, during which it encountered continued caution among traditional institutional investors towards venture capital.
According to Ramathe, pension funds and banks often operate within mandates and risk limits that make investments in early-stage businesses difficult. She also noted that some institutional investors associate venture capital primarily with companies that have yet to demonstrate commercial viability.
“The fundraising journey reinforced that institutional appetite for venture capital in South Africa is still developing,” Ramathe said.
Mamor’s strategy is designed to address some of those concerns by focusing on businesses that have already demonstrated that customers are willing to pay for their products or services.
The firm does not require portfolio companies to be profitable before investing. Instead, it will assess factors including customer acquisition and retention, the size of the addressable market and whether the business has a credible path towards profitability.
Fuzlin Levy-Hassen, Mamor’s co-founder and chief financial officer, said the fund would prioritise companies with evidence of genuine market demand.
“We are looking for businesses that have moved beyond proving an idea and can show real commercial demand,” Levy-Hassen said.
The investment strategy will focus on areas including financial access, digital infrastructure and technologies capable of expanding participation in financial services and markets.
Filling South Africa’s funding gap
The fund enters a venture capital market where investment activity has expanded but significant financing challenges remain.
Southern Africa’s venture capital market recorded R13.35 billion ($834.4 million) in active investments across 1,325 deals in 2024. Despite the growth in available capital, limited exits and difficulties securing follow-on funding continue to constrain startups seeking to scale.
For post-revenue businesses, the gap can be particularly difficult to navigate. Companies may have progressed beyond the stage of proving their business models but still lack the scale or collateral required to secure conventional bank financing.
At the same time, limited later-stage venture capital can make it difficult for businesses to transition from early commercial traction to significant expansion.
“There is a significant funding gap for early-stage, post-revenue businesses in South Africa,” Ramathe said.
Mamor is positioning its fund within that gap, seeking to provide growth capital to businesses that have established some level of product-market fit but require additional financing to expand their operations.
PIC backs local venture capital
The participation of the PIC is significant given the traditionally cautious approach of large institutional investors towards venture capital.
Venture investments can take several years to generate returns, while individual portfolio companies can also fail, making the asset class more complex for institutions managing long-term funds.
Leon Smit, acting chief investment officer at the PIC, said the investment would give the asset manager exposure to South Africa’s expanding venture capital ecosystem while advancing its transformation objectives.
“Mamor Capital brings together an experienced investment team, a clear strategy, and a strong transformation proposition,” Smit said.
The PIC also sees a broader role for institutional capital in developing the country’s venture capital industry by providing patient funding to local fund managers and technology businesses.
Ramathe said institutional interest is gradually increasing, with some investors that have yet to commit capital to venture capital now researching the asset class and exploring opportunities to participate at lower-risk points in the investment cycle.
Building local investment capacity
Mamor’s first close also reflects efforts to expand the pool of locally based fund managers capable of supporting technology companies.
Ketso Gordhan, chief executive officer of the South African Small and Medium Enterprise Fund, said increasing the number of local managers with the expertise to identify and support promising technology businesses would strengthen the country’s broader startup ecosystem.
The fund invested through the High Impact Seed Fund of Funds, an early-stage venture capital investment vehicle.
“Our investment is intended to strengthen the pool of local fund managers with the capability to identify and support promising technology businesses,” Gordhan said.
For South African startups, Mamor’s fund could provide a critical source of capital at a stage where businesses have demonstrated that their products work and customers are willing to pay, but where conventional financing remains difficult to secure.
The larger challenge, however, is ensuring that more institutional capital follows. As South Africa’s technology ecosystem matures, closing the gap between early traction and scalable growth will require not only more venture capital, but also a deeper pool of investors willing to accept the longer time horizons and risks associated with backing emerging technology companies.
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