Infrastructure as Impact: How E Squared’s Catalytic Capital Powers South African Social Enterprises
In South Africa’s vibrant yet uneven entrepreneurial landscape, one type of funding is proving quietly revolutionary: catalytic capital.
This is especially true in the social economy, where barriers such as the lack of physical space, equipment, and operational continuity often limit otherwise promising ventures.
Click here to view the full E Squared Annual Impact Report 2024 here.
E Squared is at the forefront of this shift – reimagining how early-stage social enterprises grow, scale, and sustain their impact by investing in one of the sector’s most overlooked necessities: infrastructure.
Highlighted in E Squared’s annual report is an Impact Mapping Study on catalytic capital and infrastructure investment conducted by Cheryl Jacob, former Head of Social Entrepreneurship at E Squared.
Whether it’s a training hub in a township mall, a co-working studio for coders, or a bistro staffed by youth from under-resourced communities, E Squared’s strategic capital injections are helping to transform promising ideas into credible, high-impact ventures.
The results speak for themselves: stronger operations, deeper community trust, greater talent retention and more than R100 million in follow-on funding unlocked, giving social entrepreneurs the credibility and leverage they need to scale.
This is the power of patient, catalytic capital – an investment not just in spaces, but in sustainability.
By addressing the chronic lack of infrastructure in the social enterprise space, E Squared is unlocking a new category of investment that de-risks early-stage execution while laying the groundwork for scale.
Physical infrastructure is the underappreciated but critical component for the long-term success and health of new ventures. Research from the Stanford Social Innovation Review found that organisations with access to robust infrastructure were far more likely to succeed than those without.
In fact, such ventures often achieve stronger programme fidelity, staff retention, and strategic continuity – outcomes that are vital in South Africa’s volatile funding environment.
The catalytic capital solution
E Squared’s catalytic capital assists South African social enterprises that operate under substantial resource constraints.
This lack of resources can prevent such enterprises from obtaining vital infrastructure, often resulting in reduced operational efficiency, low morale, and degraded stakeholder trust in the new venture.
With the support of E Squared through catalytic capital, many of these organisations were able to transition from fragile, early-stage operations to credible, scalable institutions.
Several of these ventures are now counted among the pipeline that will contribute to E Squared’s and their strategic partner, Allan & Gill Gray Philantropies Big Hairy Audatious Goal (BHAG) of supporting 500 responsibly-led ventures with revenue above $100K and meaningful impact by 2030
This has provided tangible results for many of these organisations, such as:
- Sunshine Cinema – Went from working in a co-founder’s home to having a dedicated office.
- Aspire Youth – Refurbished an unused retail space into “The Hub”, a centre for youth development.
- Word of Mouth (WOM) – Expanded from a cramped office to a larger facility with integrated training and warehousing capabilities.
- WeThinkCode_ (WTC) – Secured partnerships with government training institutions and expanded its operations across three provinces.
- Just Grace – Moved from borrowed school classrooms to a dedicated community centre.
- Cooktastic – Moved its operations to a much larger facility, allowing for more students and the launch of a bistro.
These transitions were made possible by catalytic capital, but they also reflect a broader systems-level impact: ventures moving from survival mode to growth mode – equipped to serve more beneficiaries, train more youth, and attract diverse partners and funders.
Beyond funding: investing in sustainability
This investment in infrastructure contributes to long-term sustainability because owning or long-leasing property reduces recurring costs while limiting an organisation’s reliance on grants.
It also allows leadership teams to focus on scaling impact, refining their programmes, and diversifying revenue – rather than constantly worrying about where they’ll operate next year.
That stability translates to greater programme consistency, improved monitoring and evaluation, and higher credibility among funders and government stakeholders.
“At E Squared, we don’t just fund ideas – we build the foundation for long-term impact,” said Gladwyn Leeuw, CEO of E Squared Investments. “By backing infrastructure early, we can help social enterprises move from survival to sustainability. That’s how we unlock not just operational stability, but a credible pathway to scale.”
A changing outlook
Despite the efficacy of investing in infrastructure, many funders still lack the mandate or willingness to support such expenses.
That outlook is starting to shift as catalytic, risk-tolerant capital – such as that deployed by E Squared – underwrites early infrastructure costs, de-risking execution and making ventures more attractive to follow-on investors.
“With stable, well-equipped spaces, social enterprises can deliver higher-quality services, attract and retain talent, and operate more efficiently,” said the report.
These insights are increasingly being incorporated into E Squared’s strategy as it strengthens its role as a thought leader and systems catalyst in the African entrepreneurship space.
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