South Africa Startups Can Benefit from the $20m JP Morgan Fund

Renowned global financial operator JP Morgan has announced a partnership with the Department of Trade, Industry and Competition of South Africa (DTIC), to invest a $20m fund to help small enterprises scale.

The partnership will make JP Morgan the first multinational investment bank in South Africa to implement an Equity Equivalent Investment Programme (EEIP) and approved by the DTIC.

Ebrahim Patel, South Africa’s Minister of Trade, Industry, and Competition speaking on the development said the scheme will support SMEs while also boosting the country’s localization efforts.

“The funding is intended to support small and medium-sized businesses in sectors of significant public importance, ranging from transactions in the green economy to funding for firms with manufacturing operations.

South Africa needs more jobs for young people and deeper levels of industrialization. This transaction will give a boost to the country’s localization efforts, creating employment and helping to strengthen economic output. I welcome the commitment to the creation of 1 000 new jobs and the focus on supporting a segment of the market that is not adequately served by the financial system,” said Ebrahim.

JP Morgan Senior Country Officer, Kevin Latter also speaking added that the South African private sector has a great capacity to multiply impact through partnerships, as the firm is aiming to do with the DTIC.

“Although the current growth rate in South Africa is low and the impediments in the economy well known, now are the time to reinforce and increase our commitment to equality and inclusive growth and work harder across our business to better serve our people, our clients, and the communities of South Africa”.

Investment packages will come in different sizes, depending on the size and capital requirement of the firm. Over an eight-year period, JP Morgan and the DTIC expect the program to generate $180m in financing transactions and 1000 jobs.

The funding process will be managed by Masakhe Partners, a joint venture between Edge Ventures, an established fund manager, and ProfitShare Partners, a successful fintech short-term financing solutions partner, both of which are the majority black-owned and controlled, and will be overseen by J.P. Morgan.