WDB Investment Holdings and venture capital company Grovest have taken a combined 57.5% stake in Seed Engine, one of the first ICT accelerators established in South Africa. The joint investment was born out of the two organizations’ goals to help develop the country’s economy by fostering the creation of successful, sustainable entrepreneurial businesses. WDB now holds a 30% stake in Seed Engine with Grovest holding the balance of 27.5%. No additional terms of the deal were disclosed.
Commenting on the rationale for the deal, Faith Khanyile, WBD’s CEO said “We needed a strategic partner that would instantly allow us to scale up our efforts around entrepreneurship in SA, especially amongst women. Seed Engine was one of the first ICT accelerators in this country, and this dynamic for-profit social enterprise is now supporting the entire entrepreneurial ecosystem from startup through to supplier.”
The investments will help Seed Engine support local entrepreneurs develop their businesses and create jobs. Noting that current incubator efforts have not been successful in producing the results South Africa needs, Donna Rachelson, Seed Engine’s CEO, stated that Seed Engine takes “…a fresh look at our entrepreneurial system and can make quick, sustainable changes that result in jobs, wealth and certainty. Through the WDB and Grovest we will be able to tap into corporate and government relationships and networks that will help Seed Engine reach deeper into the communities and sectors that need the most urgent support.”
WDB said that its likely to increase its stake in Seed Engine to 51%, a reflection of the compatibility of the partnership with WDB’s business and social agendas.
“Many people in South Africa were not raised in an entrepreneurial environment in which they were encouraged to take an idea and grow a business,” says Khanyile. “More than ever before, there is an urgency for young South Africans and female entrepreneurs in particular to be assisted in taking their ideas forward and build businesses. Our young people need jobs, and we need to help them create jobs for themselves, their families, and their communities.”