Grindstone Ventures Launches New $31.2 million Fund to Close Africa's Post-Seed Funding Gap

JOHANNESBURG / CAPE TOWN — GrindstoneXL has officially introduced a new R500 million (~$31.2 million USD) venture capital fund tailored to scaling high-growth, technology-enabled businesses across the continent. Headed by Thandiwe Maqetuka, the vehicle is built in strategic partnership with Knife Capital and Thinkroom. This follows the successful performance of Grindstone Ventures Fund I, which backed seven early-stage portfolio companies, including Locstat, Welo, and AgriLogiQ, and successfully positioned them to secure subsequent institutional funding.

The newly launched vehicle is targeting an initial close of R150 million (~$9.35 million USD). It plans to focus on building a targeted portfolio of 15 to 20 high-potential enterprises, primarily anchored in South Africa while retaining the flexibility to invest selectively across other regional markets.

Tackling Africa's Missing Middle

Grindstone Ventures is specifically designed for companies that have moved past initial product-market validation but still encounter major hurdles when trying to secure follow-on capital for broader expansion.

“The evolution from Seed to Series A remains one of the clearest gaps in the African venture ecosystem,” noted Keet van Zyl, Co-Founder of Knife Capital.

While tech funding volumes have experienced fluctuating cycles and tighter seed markets, many growing ventures find themselves undercapitalized just as they attempt to scale operations. Thandiwe Maqetuka emphasized that the fund targets companies caught right in the middle between proving commercial demand and reaching the scale required by large institutional investors.

“That is Africa’s missing middle. Our opportunity is not simply to provide more capital, but to identify exceptional businesses earlier, invest at a point where capital remains scarce, take meaningful ownership positions and work actively with founders to build companies capable of scaling, attracting institutional capital and ultimately delivering realisable returns,” explained Thandiwe Maqetuka.

Structured Support and Strategic Growth

The fund will deploy capital across the Seed to Series A lifecycle, maintaining dedicated dry powder to provide follow-on funding to its strongest portfolio performers. Rather than taking passive stakes, the investment model centers on acquiring meaningful minority positions and concentrating resources behind top-tier companies.

Portfolio firms will gain direct access to the wider Grindstone ecosystem, benefiting from hands-on guidance covering operational strategy, corporate governance, market access, and exit preparation. With more than 1,000 businesses screened annually and roughly 50 selected for accelerator cohorts each year, the team brings deep technical and commercial acceleration expertise to the table.

A Disciplined Focus on Exits and Inclusion

A cornerstone of the new fund's thesis is prioritizing liquidity and realisable returns over speculative paper valuations.

“We have deliberately designed the portfolio around the realities of venture investing,” said Thandiwe Maqetuka. “We diversify at entry, allow performance to emerge and then concentrate capital behind the strongest performers. Importantly, we are building for liquidity from the outset. Paper valuations don’t return capital to investors, exits do.”

Building on the momentum of Fund I—which is currently finalizing an exit to return capital to its backers—the team is also committed to driving structural diversity within the tech landscape. The fund has set an ambitious target for at least 50% of its portfolio to consist of black-owned businesses, alongside maintaining strong representation among female founders and women in leadership.

“We don’t believe investors should have to choose between financial performance and building a more inclusive investment ecosystem,” added Thandiwe Maqetuka.