Financial Accesspartially implementedMedium TermScience, Technology and Innovation

Innovation Fund Scale-up Beyond Pilot Phase

Theme: venture_finance

First raisedMay 2025Last discussedMay 2025

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Assessment

Growth Impact3/5

Feasibility3/5

Responsible: Department of Science, Innovation and Technology / Innovation Fund / IDC / PIC

Feasibility Assessment

Medium-term, moderate cost. Legislative mandate formalisation is priority. PIC co-investment requires amended investment mandate. University technology transfer capacity is the pipeline constraint.

Description

The South African Innovation Fund (IF), established by the DSIT in 2019 as a blended finance vehicle to commercialise university and CSIR research, completed its pilot phase (R1.4 billion committed to 42 portfolio companies) in 2023. Scale-up to R5 billion by 2027—as recommended by the PC on Science and Technology BRRR 2024—requires: a permanent legislative mandate (the IF currently operates under a company structure rather than a statutory framework), co-investment from the PIC and IDC, stronger deal pipeline from universities (through the Technology Transfer Office network), and a dedicated growth-stage fund for companies that have outgrown the IF's early-stage focus but are too small for IDC commercial finance. The DSIT's STI Decadal Plan 2022–2032 (id=69) sets a 1.5% of GDP R&D target, and the Innovation Fund is the vehicle for translating public R&D expenditure into commercial outcomes. South Africa currently commercialises less than 4% of university patents—the OECD average is 18%.

OECD

Referenced in OECD Economic Surveys: South Africa

OECD SA Survey (2017, 2020, 2022, 2025). Related reform area identified across OECD surveys.

The Innovation Fund's pilot demonstrated that blended public-private funding can build an investable startup ecosystem, but pilot scale is too small to shift the needle on commercialisation of SA's R&D base. — PC on Science, Technology and Innovation BRRR, 2024