South Africa’s venture capital industry is undergoing a structural shift, moving from a focus on capital raising to delivering profitable exits for investors.
A coalition of local startup investors has highlighted that realised returns are now outpacing invested capital, with gross internal rates of return (IRR) reaching 54%.
This performance metric challenges the prevailing narrative that emerging-market venture capital is primarily a long-duration, illiquid bet.
The 54% gross IRR indicates that early-stage investments in the region are generating substantial liquidity events, validating the asset class for institutional allocators who have historically been cautious about African tech exposure.
The pivot toward exits coincides with broader trends in Southern African markets, where institutional investors are increasingly seeking alternative yield sources.
While traditional heavyweights have faced valuation pressures, the venture sector’s ability to deliver high single-digit to double-digit annualised returns offers a compelling diversification tool.