Innovate Durban Funding Map
PAN collaborated with Innovate Durban, an entity established by eThekwini Municipality, and local innovators to develop a map of innovation funding in South Africa. The map was launched at the Innovation Festival in March 2020.
The process of developing the funding map sought to involve local innovators in the process, by introducing them to different funding instruments and by workshopping ways of collecting funding information. The process followed three main steps. These were implemented over a period of 4 months as a rapid evidence review, validation and information collection:
- Framework and initial map: Researchers from the HSRC reviewed reports and research on innovation funding. Based on this review they developed a framework of potential funding instruments, and populated an initial funding map with potential contacts.
- Innovator add and validate: Local innovators were invited to assist with adding to and validating content in the initial funding map. This stage included two 1-day workshops to review potential funding instruments and explore ways of collecting information on potential funding sources.
- Integrated (living) map: Additional content and feedback from innovators was integrated into a final map, which Innovate Durban intends sharing and updating with regular input from local innovators.
Funding map framework and clusters
The final framework identified over ten possible instruments that either fund innovation activities directly or subsidise costs associated with innovation (including costs associated with finding funding). These included:
- Direct funding - commercial, such as traditional venture capital with an emphasis on a financial return on investment;
- Direct funding - impact, such as development bank financing, where investors expect a mix of social and financial returns;
- Direct funding - social, such as crowdfunding sites or stokvels, where investors expect a mix of social, financial and/ or product-related rewards;
- Direct funding - corporate social investment (CSI), with an emphasis on social impact or returns;
- Procurement of innovation through RFIs, RFPs, innovation challenges and freelancer gig-work platforms;
- Innovation cost reduction, such as through subsidised infrastructure or services;
- Reducing cost of innovation or enterprise failure, such as bankruptcy costs;
- Finance/ funding capacity building to source and manage funding efficiently;
- Market matching for raising visibility amongst potential users, customers and investors;
- Funding intermediary/ advisory services to assist innovators identify appropriate funding sources and to create successful proposals; and
- Technology development/ adoption services and incentives to subsidise and support the use of emerging technologies.
The joint mapping exercise identified over 700 funding-related contacts relevant to South African innovators. These contacts were clustered according to:
- Maturity of innovation they support, from early (such as angel investors or government grants) to late (such as growth financing or private equity)
- Scale of funding they provide or mediate, from small to large.
See the Innovate Durban website for updates on this and other projects.