4Di Capital, a venture capital firm based in Cape Town, South Africa, is gearing up to launch its third venture fund aimed at providing seed to Series A funding for promising startups across Africa. Established in 2009, 4Di Capital has become a prominent name in the venture capital sector, particularly in the Southern and Eastern regions of Africa. The firm is known for its entrepreneurial leadership team, which brings firsthand experience in company building to the table.
Over the years, 4Di Capital has made significant investments in a variety of South African startups, including Snapt, LifeQ, Sensor Networks, Aerobotics, Lumkani, Zoona, InvestSure, and Tagmarshal. The firm has also expanded its reach into East Africa with investments in Kenyan enterprises such as Wasoko and Flare.
The venture capital firm’s inaugural angel fund was launched in 2011, followed by its first official venture fund in 2016. The second venture fund, initiated in 2019, received substantial backing from the SA SME Fund. This fund has been actively investing in a mix of South African and other African startups, sharpening 4Di’s focus on early-stage ventures.
Justin Stanford, a co-founding general partner at 4Di, shared insights on the firm’s approach during an interview with Disrupt Podcast. He emphasized 4Di’s role as an early-stage backer, often providing the first institutional investment for startups, and acting as a supportive advisor and mediator for the founders.
With the second venture fund nearing its investment capacity after backing 10 companies, Stanford mentioned the possibility of one or two additional investments before the fund is fully committed. Looking ahead, 4Di Capital is contemplating the timing for raising its next venture fund.
Despite the current global “funding winter” affecting the investment climate, Stanford is optimistic about the fundraising environment, noting that it has become somewhat more favorable compared to the previous year. He acknowledged the challenges but expressed confidence in the gradual reopening of the market.
4Di Capital plans to explore more international fundraising opportunities, as the African investment model gains traction among global investors. In the past, the firm primarily relied on local sources, but now sees a growing interest from overseas investors.
Stanford believes that 4Di’s established reputation and successful track record with the 2016 and 2019 funds, which showcase strong performance and notable portfolio companies, will be attractive to potential Limited Partners (LPs). The firm’s history of fostering successful ventures is expected to aid in its fundraising efforts for the upcoming third venture fund.
