Fund TARGET: R1 billion (R600 MILLION first close
Status: Currently investing
ETHOS AI FUND I
The Ethos AI Fund I was launched in 2018, with a successful first close of R600 million, and a final target size of R1 billion.
Our AI Fund identifies and invests in businesses that can benefit disproportionately from artificial intelligence. The core capability and competitive advantage of the Fund is working with companies to transform the company through the use of artificial intelligence. This capability is comprehensive and includes working with organisational design, strategic planning, resourcing, use of data, technology, analytics, incentives, culture, execution, change management, and people management.
The primary type of Artificial Intelligence the Fund focuses on is algorithmic decision making. These algorithms typically help organisations make high frequency decisions in multiple places in its value chain. These decisions are not suited to human capabilities, typically due to computational complexity and breadth of data utilised. This in turn allows humans to focus on decisions not suitable for machines, such as creativity, relationships, strategy or communication.
The Fund seeks to invest 80% of its capital in growth equity, investing between R100 million and R200 million in each opportunity, often as co-investments with other Ethos-managed Funds. Target companies are established businesses with strong prospects, low business model risk, established profitability and, ideally, positive cash-flows.
The Fund also seeks to invest 20% of its capital in earlier-stage growth equity – businesses promising strong revenue growth, usually in existence for more than three years, potentially not profitable yet, with some business model risk.
Geographically the Fund is targeted in sub-Saharan Africa.
The Ethos AI Fund I partners are Nic Kohler and Roger Grobler.