Grindstone Ventures Launches $31M Fund For African Startups

STARTUP VENTURE CAPITALSeptember 16, 2026 at 2:51 PM UTC

TLDR

South Africa's Grindstone Ventures launches R500 million fund for African startups, targeting seed to Series A investments in tech companies.
Fund led by Thandiwe Maqetuka & backed by Knife Capital, aiming for first close of R150 million, focusing on governance support, sales, strategy, and exits preparation.
Grindstone aims to bridge funding gap between seed and Series A in Africa, prioritizing Black-owned companies and women representation in its portfolio.

South Africa’s Grindstone Ventures has launched a R500 million ($31 million) fund to invest in technology companies from seed through Series A. The fund, led by Thandiwe Maqetuka and backed by Knife Capital and Thinkroom, is targeting a first close of R150 million.

The fund plans to invest in 15 to 20 companies, with most investments in South Africa and selected deals elsewhere in Africa. Grindstone will provide capital alongside support in governance, sales, strategy, fundraising and preparation for exits. The fund is targeting companies that have generated revenue but need capital to reach a stage where larger investors can participate.

The new vehicle follows Grindstone Ventures Fund I, which invested in 7 companies including Locstat, Welo and AgriLogiQ. Grindstone said the first fund is completing an exit that will return capital to investors. Knife Capital and Thinkroom will provide investment, operating and company-building support to the new portfolio.

Grindstone is targeting a gap between seed and Series A funding in Africa. Research published in 2026 found that only 10 of 105 African startups that raised seed funding in 2022 had completed a Series A within the following 34 months. 81 remained active without raising the next equity round.

The fund also plans for at least 50% of its portfolio companies to be Black-owned and aims for representation of women founders and executives. Maqetuka said the fund will focus on returns while expanding access to institutional capital for founders who have received less venture funding.

Key Takeaways

Grindstone’s R500 million fund is targeting a stage where many African startups stop progressing. Seed capital can help a company launch a product and prove that customers will pay, but reaching Series A requires more revenue, governance, management systems and evidence that the business can scale. Data on the 2022 African seed cohort shows the size of that problem: only 10 of 105 companies reached Series A within 34 months, while 81 remained active without securing the next round. That creates an opening for funds willing to invest after the first signs of commercial demand but before a company meets the requirements of larger investors. Grindstone is also keeping the planned portfolio at 15 to 20 companies, which would allow it to make larger investments and reserve capital for follow-on rounds rather than spread the fund across many startups. Its first-close target of R150 million will show how much investor demand exists for that strategy. The first fund’s planned exit could also matter because African venture funds need more cash returns to attract pension funds, family offices and other institutions. If Grindstone can move companies from seed to later rounds and exits, the model could bring more capital into the funding gap it is targeting.

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