Stocks & Strauss Fund Manager has officially announced the launch of the University Technology Fund II (UTF II), achieving a significant milestone in December 2024. All agreements for the fund have been finalized, and a substantial portion of the capital has been committed, marking a pivotal step toward reaching the target fund size of ZAR400 million (approximately US$21.4 million).
The inaugural fund, UTF I, showcased the remarkable potential of technologies originating from universities. Among its standout investments were Hyrax Biosciences, a leader in bioinformatics whose innovative software played a crucial role in the early detection and analysis of the Covid-19 Omicron variant, and CubeSpace, a globally recognized company that has garnered acclaim from NASA and is trusted by over 250 clients worldwide for its advanced satellite control systems and related technologies.
UTF II is set to invest in 15 to 20 companies, with a focus on highly scalable technology intellectual property (IP) across diverse sectors. The fund aims to allocate resources towards technology commercialization and growth, ensuring a strategic approach to nurturing innovative ventures with significant potential.
In a bid to bolster the entrepreneurial ecosystem within the country, UTF II has broadened its mandate to include investments in alumni of South African universities. This initiative seeks to foster a more interconnected ecosystem around universities, akin to the pivotal role Stanford University played in the development of Silicon Valley.
The fund has secured anchor investments from prominent entities such as the SA SME Fund, Stellenbosch University, and Allan & Gill Gray Philanthropies Africa, reinforcing a collaborative co-investment model built on shared vision and goals. Other notable university investors in UTF II include the University of Pretoria, the University of Cape Town, and WITS University, further solidifying the initiative’s commitment to promoting innovation.
Wayne Stocks, managing partner at Stocks & Strauss Fund Manager, expressed enthusiasm about the fund’s potential, stating,
The potential is immense, both for the companies and for investors. The world is witnessing a shift towards valuing university intellectual property as an important asset class and opportunity. These companies are also providing solutions to real-world challenges, which boosts their impact and value. If you’re seeking deep-tech investment opportunities in Africa, universities are unparalleled hubs. They possess the capacity, skilled talent, cross-faculty institutional knowledge, and long-term funding necessary to drive meaningful innovation and development in this space.
Anita Nel, chief director for innovation and commercialization at Stellenbosch University, highlighted the partnership with UTF II as a means to support innovation on campus and assist students, staff, and alumni in bringing their ideas to market.
She stated, “The fund accelerates the development of new technologies and reinforces the university’s reputation as a hub for research and innovation, building on the successful relationship between our university and UTF I. Additionally, the partnership offers potential financial returns that can be reinvested in research and infrastructure.”
Ketso Gordhan, CEO of the SA SME Fund, underscored the significance of UTF in shaping South Africa’s economic future;
UTF Fund I is a powerful example of what can be achieved when we align resources to unlock the potential of South Africa’s brightest minds and world-class intellectual property. UTF Fund II will elevate our innovation landscape further, and we foresee that it will attract both local and international investment interest.
With the establishment of UTF II, Stocks & Strauss Fund Manager is poised to continue its mission of fostering innovation and driving economic growth through strategic investments in university-originated technologies.