In his State of The Nation Address (SONA) on 6 February 2025, President Cyril Ramaphosa mentioned the Innovation Fund of the Department of Science, Technology, and Innovation as part of government's measures to support SME Development.
This Innovation Fund will form part of the government’s priorities for the 2025/26 financial year and the political responsibility for its implementation rests with the Minister of Science, Technology and Innovation, Prof. Blade Nzimande.
What is the DSTI's Innovation Fund?
In 2021, the Department of Science, Technology, and Innovation (DSTI) South Africa piloted the Innovation Fund - as part of its suite of innovation support initiatives.
At its core, the Innovation Fund catalyses the creation and sustained growth of the high-tech SME sector.
The Innovation Fund focuses on de-risking early-stage SME creation to generate sustainable pipeline opportunities of viable investable high-tech enterprises for later-stage investments by the private sector.
Compared to traditional financing institutions such as private equity investors and commercial banks, the Innovation Fund provides less stringent, but rigorously implemented, financial support.
Who does this Fund target?
The Innovation Fund cuts across various stages of the SMEs’ business development life cycle.
The Innovation Fund is structured to drive public–private co-investment in innovative high-tech SMEs.
* The Innovation Fund model namely leverages the investment expertise of institutions such Technology Innovation Agency, the SA-SMME Fund and the Public Investment Cooperation, which in turn, drive the syndication of investment with various Venture Capital (VC) Fund management entities.
What is the objective of the Fund?
1. Leverage Private Capital:
Attract additional private sector investments into the South African (SA) innovation ecosystem and Venture Capital (VC) industry.
2. Stimulate Innovation:
Encourage the development and commercialisation of locally developed IP and innovative products and services.
3. Support Startups and tech-enabled SMEs:
Provide catalytic (risk) capital backing to early-stage startups and tech-enabled SMEs;
4. Build a Resilient Innovation Ecosystem:
Strengthen the infrastructure and support systems for innovation and venture building, including venture studios, incubators, accelerators, hubs etc. to ensure a robust and interconnected ecosystem.
The DSTI's financial investement
The DSTI invested to date almost a billion rand (R917.2 million) in the following investment intermediaries
- Technology Innovation Agency (TIA),
- Public Investment Corporation (PIC). and
- the SASME Fund.
The Fund has leveraged more than half a billion co-investments from the private sector.
To date the Fund has supported 12 Venture capital firms and around 96 technology investment opportunities and enterprises.
How can SMEs access the Fund?
More information on the Fund can be accessed go to: https://innovationbridge.info/ibportal/innovation-fund
For current Open Calls: https://www.tia.org.za/innovation-fund-first-time-and-emerging-fund-man… or https://epftechfund.orcaa.ai
For further enquiries on the fund, please contact: Mr. Konanani Rashamuse, Koanani.Rashamuse@dsti.gov.za
Media enquiries:
Veli Mbele
E-mail: Veli.Mbele@dsti.gov.za
Cell: 064 615 0644
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