The world has shifted to innovation-driven growth, where countries that combine bold ideas with catalytic capital are shaping the industries of the future.

Cape Town and the Western Cape are already showing this potential, with concentrated talent and early-stage ventures emerging as national leaders.

For South Africa to secure a meaningful role in this future, increasing venture capital (VC) at key stages must be a strategic priority.

Strengthening VC goes beyond funding individual ventures; it shapes the ecosystem, determines the scale and quality of opportunities for our innovators, and drives sustained economic growth and global competitiveness.

Even with our talent and ideas, too many promising ventures struggle to secure the funding they need to grow and compete globally.

Venture capital fuels innovation and allows ideas to become businesses that create jobs and economic value.

Cape Town and the Western Cape show what is possible when entrepreneurial energy, skilled talent, and targeted investment come together.

The region attracts a significant share of South Africa’s VC flows, hosts established start-up hubs and benefits from a growing community of experienced investors.

Local firms such as Knife Capital, Savant and 4Di have built respected investment vehicles that demonstrate our ability to compete internationally.

What must shift is the level of intensity and co-ordination in how the ecosystem grows.

Good ideas need both a seed and a climate, and policy plays a central role in shaping that climate.

Small, open economies have shown how deliberate choices can champion innovation, reward early risk and attract investment.

South Africa has many of the right foundations.

Cape Town and the Western Cape remain highly attractive places to live and work, with major tech companies headquartered here, creating natural agglomeration effects.

Our research institutions are strong, entrepreneurial energy is evident, and we have footholds in high-growth sectors such as FinTech, HealthTech, renewable energy and agri-innovation.

At the heart of start-up innovation The region has grown into the heart of the national start-up ecosystem, home to accelerators, angel networks and VC funds that give the market depth and credibility.

This kind of density is crucial because it creates a space where early-stage ventures can collaborate, learn and secure the capital they need.

According to the Southern African Venture Capital and Private Equity Association, which tracks and analyses private investment activity across the region, 92 South African start-ups raised $162m (R2.7bn) across 184 deals in 2023, supported by 72 funds.

This brought the total value of the VC asset class to nearly $600m across more than 1,100 active deals.

The Western Cape accounted for almost half of this by value, and more than half by deal volume, highlighting its importance as a national anchor.

Yet the overall size of South Africa’s VC market remains modest relative to the broader economy.

A persistent constraint is limited institutional participation.

Pension funds are permitted to allocate up to 15% of their assets to alternative investments, but many allocate far less,....