South African VC Mamor Capital raises $18.8 million first fund

For South African startups, getting customers is only half the battle. Even after people start paying for their products, raising enough money to grow can remain difficult. That is the funding gap Mamor Capital Ventures wants to target with its first venture capital fund.

The black women-owned and managed firm has raised R300 million ($18.8 million) in the first close of its inaugural fund, with the Public Investment Corporation (PIC), South Africa’s largest asset manager, as its anchor investor. 

Mamor is still raising towards its R550 million ($34.375 million) target and says it will invest in South African technology companies that already have paying customers. 

Mamor’s fund points to a bigger problem in South Africa’s startup market, where companies can have paying customers and a working business yet still struggle to find investors willing to fund their next stage of growth.

Mamokete Ramathe, founder and chief executive officer (CEO) of Mamor Capital, revealed that the firm spent more than three years raising the fund and found that many traditional investors, including pension funds and banks, remain cautious about venture capital.

Some investors, she said, have mandates or risk limits that make it difficult to invest in early-stage companies. Others still associate venture capital with backing businesses that have not yet proved that their products work.

“The fundraising journey reinforced that institutional appetite for venture capital in South Africa is still developing,” Ramathe told TechCabal in an interview on Monday.

Mamor is trying to reduce some of that risk by investing in companies that have already shown that customers will pay for their products or services. Ramathe said the firm does not require companies to be profitable before investing. Instead, it looks at…