Grovest Tech (GroTech) has re-opened its fund to raise an additional R38m by way of an issue of 38,000 no par value ordinary shares at an issue price of R1,000 per ordinary share.

Clive Butkow, CEO of GroTech Venture Capital Company, said: “We have a significant pipeline of investment opportunities and are confident we will deploy the current and additional capital within the next 12 months.”

At the February 29, GroTech had raised capital of R21m with written commitments for a further R41m.

The current window of capital raising is to raise this further amount to reach, R100m of subscribed capital by August 31, 2016.

“With the R100m we estimate to have circa 7 to 10 investments,” Butkow told Africa Global Funds.

He said that investors in the Fund include both retail investors (HMWI) and institutional investors, including family offices and wealth managers. 

An investment in GroTech, a registered Section 12J Venture Capital Company, entitles investors to deduct 100% of the investment from taxable income in the year in which the investment is made.

GroTech continues to gain market traction in South Africa as the “go-to funder” for investment in disruptive digital technology companies.

To date, GroTech has invested in SMEasy, an online, easy-to-use business management and accounting solution, and is currently in discussions to close a further two prospective investments - POS Solution in a Box, a cloud-based Point of Sale (POS) solution; and Courier on Demand.

GroTech has a highly attractive deal flow pipeline with a targeted return in excess of 30% IRR (a minimum return of 5 times money over a period of 5-6 years).

The Directors anticipate deploying GroTech’s capital within about 12 months, based on a promising current pipeline and strong visibility of GroTech in the VC eco-system.

Commenting on whether the Fund can invest outside of South Africa, Butkow said: “Our fund allows for 20% of our capital deployed to non-qualifying companies enabling us to invest anywhere in the world.”