South Africa: New $17mln ASI Fund backs SME takeovers by young entrepreneurs
The fund introduces a new ownership model in the local market, designed to connect retiring business owners with aspiring business leaders who lack the capital and access to acquire existing companies. The move comes amid persistently high unemployment in South Africa, with a jobless rate of 32.9% in the first quarter of 2025.
'This is more than a business transaction – it's about legacy, community and transformation,' said Tishalan Pillay, executive director of growth at ASI Group. 'We are proud to pioneer a model that enables continuity for SMEs and creates real opportunities for the next generation of business leaders.'
How the model works
The ETA model, already well established in markets such as the US, provides funding and support to 'searchers' – typically young professionals – who seek to acquire and operate existing businesses. ASI's fund is the first institutionalised version of this model in South Africa.
The process involves:
- Connecting entrepreneurs and owners: Potential searchers and business owners apply through ASI's online channels to be matched through the programme.
- Sourcing and assessing businesses: ASI assists in identifying acquisition targets and conducting due diligence.
- Facilitating funding and acquisition: Selected entrepreneurs receive funding and step into leadership as CEOs of the acquired businesses.
- Post-deal support: ASI offers strategic guidance and mentorship to ensure long-term growth and continuity.
Addressing economic and generational shifts
Many South African business owners are approaching retirement without succession plans, while younger professionals remain excluded from traditional ownership pathways due to lack of capital. ASI aims to bridge this gap while preserving businesses that contribute to local employment and economic stability.
The initiative also aligns with broader demographic and labour trends. Africa is projected to have the world's largest workforce by 2035, but meaningful economic participation remains constrained without access to assets and capital.
'The ETA model provides a practical, lower-risk route to business ownership for young South Africans, while also supporting retiring owners who want to see their businesses continue,' said Pillay.
Encouraging early momentum
The fund has already generated interest across provinces, with early applicants signalling strong demand for a more accessible path to ownership outside of traditional startup models.
'Succession in SMEs is an overlooked challenge in South Africa,' said Pillay. 'This initiative gives both sellers and buyers a way forward that benefits communities, employees and the broader economy.'
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