Key Takeaways
- • ICT accounted for 62.7% of southern African venture capital deals in 2025, while AI and machine learning represented just 1.6% as a standalone category, according to SAVCA's 2026 Venture Capital Industry Survey.
- • Survey research partner Stephen Lamprecht of VS Nova argues the low standalone figure understates AI's influence, as the technology is increasingly embedded across healthcare, financial services, agriculture and ICT rather than confined to a separate category.
- • Edge Growth co-founder Jason Goldberg urges investors to assess whether AI will increase or reduce the value of a company's offering, citing declining valuations in parts of the software sector.
- • AI-native services businesses are emerging as a 'new scale advantage', as agentic systems allow professional expertise to be delivered at lower cost, a segment venture investors have historically avoided.
- • Lamprecht stresses the core VC model is unchanged: investors still need very high returns within three to seven years, and AI-enabled businesses must meet that standard.
Summary
AI's share of southern African venture capital activity is small when measured as a standalone category, but industry participants argue that this metric substantially understates the technology's influence. According to the Southern African Venture Capital and Private Equity Association (SAVCA) 2026 Venture Capital Industry Survey, information and communications technology (ICT) accounted for 62.7% of all regional VC deals in 2025, while AI and machine learning represented 1.6% as a standalone category.
Stephen Lamprecht, founder of management consultancy VS Nova and a research partner on the survey, said AI is increasingly absorbed into application areas across the economy. "We can no longer treat AI as a separate category because increasingly it's being absorbed into the application areas where it creates value," he said. Johan Steyn, AI expert and founder of AIforBusiness.net, described the 1.6% figure as accurate but the least interesting number in the survey, comparing separate AI deal counts to counting 'internet deals' in 2005. Steyn argued South Africa's opportunity lies in applied AI solving local problems rather than funding frontier models, and said capturing that value depends on clearer policy, a deeper local capital pool and retaining companies and talent domestically.
Speaking at the SAVCA VC Conference in Stellenbosch in September, Jason Goldberg, co-founder of enterprise and supplier development specialist Edge Growth, characterised AI as a general-purpose technology. He said the key investor question is "what becomes more valuable as AI gets better, and what becomes less valuable," pointing to declining valuations in parts of the software sector as AI lowers the barriers of development. Goldberg identified AI-native services businesses as a "new scale advantage," noting that venture investors had largely avoided professional services because they were difficult to scale.
Lamprecht cautioned that while AI is making some businesses scalable enough to meet venture return requirements, it is too early to judge whether these trends will prevail. He stressed that investors still require very high returns within three to seven years, and that AI-enabled businesses must meet that standard. He also noted that AI-enabled competitors are not limited to local start-ups. Lamprecht pointed to public health as a potential area of opportunity, citing Netcare and Dischem's positioning in the public health space in relation to the NHI, and said investment value in this area would come through private sector proxies rather than government directly.
Lamprecht concluded that venture capital remains about investing in people and businesses, and that experienced investors will need to help founders convert technological potential into sustainable businesses.
Stephen Lamprecht, founder of management consultancy VS Nova and a research partner on the survey, said AI is increasingly absorbed into application areas across the economy. "We can no longer treat AI as a separate category because increasingly it's being absorbed into the application areas where it creates value," he said. Johan Steyn, AI expert and founder of AIforBusiness.net, described the 1.6% figure as accurate but the least interesting number in the survey, comparing separate AI deal counts to counting 'internet deals' in 2005. Steyn argued South Africa's opportunity lies in applied AI solving local problems rather than funding frontier models, and said capturing that value depends on clearer policy, a deeper local capital pool and retaining companies and talent domestically.
Speaking at the SAVCA VC Conference in Stellenbosch in September, Jason Goldberg, co-founder of enterprise and supplier development specialist Edge Growth, characterised AI as a general-purpose technology. He said the key investor question is "what becomes more valuable as AI gets better, and what becomes less valuable," pointing to declining valuations in parts of the software sector as AI lowers the barriers of development. Goldberg identified AI-native services businesses as a "new scale advantage," noting that venture investors had largely avoided professional services because they were difficult to scale.
Lamprecht cautioned that while AI is making some businesses scalable enough to meet venture return requirements, it is too early to judge whether these trends will prevail. He stressed that investors still require very high returns within three to seven years, and that AI-enabled businesses must meet that standard. He also noted that AI-enabled competitors are not limited to local start-ups. Lamprecht pointed to public health as a potential area of opportunity, citing Netcare and Dischem's positioning in the public health space in relation to the NHI, and said investment value in this area would come through private sector proxies rather than government directly.
Lamprecht concluded that venture capital remains about investing in people and businesses, and that experienced investors will need to help founders convert technological potential into sustainable businesses.
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