VC Survey - savca

opment initiatives, entities such as the SME loan instruments .... media/entertainment (7%), together accounting for almost half of all deals reported. ... changes in sector allocation between 2012 and 2015 are software (up from 13% to 26%), ...
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SAVCA 2015 VENTURE CAPITAL SURVEY

FROM POWERFUL PARTNERSHIPS COME POWERFUL SOLUTIONS

MERGERS & ACQUISITIONS Our extensive know-how and innovative approach to transactions are what makes us the preferred legal partner. And being the preferred legal partner has culminated in Cliffe Dekker Hofmeyr being recognised as the #1 South African M&A law firm by Mergermarket and DealMakers.* * In 2015 Mergermarket ranked us as the #1 South African law firm for M&A in Africa and the Middle East by the number and value of transactions that we advised on and DealMakers ranked us as the #1 law firm for M&A in South Africa by the number and value of transactions that we advised on.

Cliffe Dekker Hofmeyr. The legal partner for your business.

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Table of contents

Infographics

2

Foreword

4

1 About the survey

5

1.1 Objectives and methodology

5

1.2 Definitions

5

1.3 Survey scope and attributes

5

1.4 Information excluded from survey data

5

2 The state of venture capital in South Africa

6

2.1 VC transactions: Comparison with previous years

6

2.2 Number of transactions concluded

8

2.3 Contribution by stage of the deal

9

2.4 Sector allocation

10

2.5 Location of transactions

11 13

3 Who invests into South African venture capital? 3.1 Value of transactions by type of fund

13

3.2 Deal flow reported

14

3.3 Equity preferences

14

3.4 Exit history and exit mechanisms used

15

3.5 Fund manager attributes

17

3.6 Undrawn commitments and new fund management activities

17

4 State of the South African VC industry: A comparison with previous SAVCA VC surveys

18

5 Conclusion

22

6 About Venture Solutions/SAVCA

24

7 Abbreviations

24

SAVCA and Venture Solutions would like to thank the survey participants, many of whom wish to remain anonymous.

01

RISING ACTIVITY LEVELS

SOLID RETURNS

2012-2015

• Number of VC fund managers up 41% • More VC professionals • More deal flow

20% ROI

South African VC in 2 015

R 1 . 87 b n

d across more tha n 18 Investe 7

dea ls

STRONG EXIT PERFORMANCE More than half of fund managers have done at least one exit

CONFIDENCE IN THE SECTOR

AVERAGE DEAL SIZE DOWN 22% 2009-2012 R9.3m

• •

02

Two thirds expect profitable exit in next year Returns expectations vary from 2 to 5 times money back

2011-2015 R7.3m

The most common reason for deal failure is poor due diligence.

Bridge the information gap between entrepreneurs and investors.

@YueDiligence www.yuediligence.com

#1

SELL-SIDE MERGERS & ACQUISITIONS ADVISORY IN SUB-SAHARAN AFRICA 2014 Zephyr/Bureau Van Dijk A member of the

group of companies

For more information contact us: Cape Town: Tel: +27 21 202 2400 | Johannesburg: Tel: +27 11 615 0602 (International) | Tel: 086 111 5456 (Local) [email protected] | www.xigo.co.za

Foreword SAVCA is pleased to present the SAVCA 2015 Venture Capital Industry Survey. This survey follows similar studies conducted by SAVCA in 2010 and 2012, and is designed to create a more comprehensive understanding of the venture capital (VC) sub-set of the private equity industry in South Africa, covering VC-type deals made by private fund managers as well