A Pan-African early-stage venture capital firm called Ventures Platform closed its fund at $46 million with the intention of investing even more in “category-leading” businesses all over the continent.
The 11-person company, which is six years old and has gone public to seek $40 million for this fund, had an undisclosed first closure in December. According to creator and general partner Kola Aina, the majority of its limited partners in the first closure were predominantly based in Africa, which was a deliberate endeavor.
“Getting local finance for our first close was strategic for us. But as you’ll see, the second close will come from international funds of funds and DFIs, where we have pledges, he stated in the interview from December. “However, in the end, I think it’s in the interest of foreign capital to be in bed with local capital from a derisking aspect, as much as foreign capital is vital.”
In addition to exceeding its initial goal, Ventures Platform succeeded in finding its subsequent group of limited partners.
Four development finance institutions (DFIs), including the International Finance Corporation (IFC), the British International Investment (BII), Proparco with FISEA, and AfricaGrow, a fund of funds managed by Allianz Global Investors, are among the fund’s newest limited partners (LPs). Standard Bank, the largest bank in Africa by assets, is another. A to Z Impact, a social impact company, corporations, commercial banks, international institutional investors, and high-net-worth individuals are some of the additional limited partners (HNIs).
Aina informed TechCrunch of the inclusion by saying, “No other fund in the area of our kind has four DFIs as LPs. We can sort of draw on their experience and provide long-term funding to our portfolio firms because of the diversified mix we have, which is excellent on many levels.
Since its founding in 2016, Ventures Platform has invested in more than 60 companies in industries including fintech, insurtech, health tech, edtech, agritech, enterprise SaaS, and digital infra plays and talent accelerators. Marketforce, Mono, PiggyVest, and the two most valuable African startups according to YC, Nomba and Reliance HMO, are just a few of the famous names in its portfolio.
Pre-seed and seed stage investments made up the majority of these investments. Ventures Platform, which achieved a complete exit following the sale of Paystack to Stripe, has improved since the fund’s initial close and now issues Series A checks to its portfolio companies, some of which have direct access to follow-on funding (Series B and up) from the company’s limited partners.
The early-stage company, which has offices in Abuja and Lagos, plans to lead pre-seed and seed levels, investing an average of $250,000, while taking part in and writing follow-in checks totaling more than $1 million in Series A rounds, according to Aina.
The closing of this fund occurs as deal flow activity in Africa has decreased due to local and foreign venture capitalists pulling back amid rising interest rates and a global reversal in public markets. The data for venture capital in both years clearly show this reversal of events.
For instance, counting down to the conclusion of 2022, it appears that the amount raised by African startups will be maintained or just marginally surpassed. At the beginning of 2022, many people believed that this amount would be greatly surpassed.
In this time, startups are working to maximize their burn and stretch their runways as much as possible. Aina, like many investors, is happy with the current reset in Africa’s fundraising environment, even though Ventures Platform has plans to help and scale its portfolio firms in situations like this through a value-add approach called “Platform and Networks.”
“There has been a lot of demand in the past two years, especially in 2020 and 2021, to expedite proceedings. But now that valuations are leveling and the velocity is more acceptable, we’re extremely happy to be where the market is, said the general partner. “As a result, we can appropriately conduct due diligence and governance. Because this is a long-term collaboration, we are being much more selective about the founders we assist. We are paying attention to business models and economics while also making sure we have the capital reserves to support our companies.
Aina indicated in December that Ventures Platform was stepping up its efforts in countries other than Nigeria, actively looking for prospects in places like French-speaking West Africa, Kenya, and Egypt. The company has supported 20 businesses in the past year, some of which are from Senegal, Kenya, Uganda, and South Africa, according to the report.
Additionally, Ventures Platform has expanded its senior management and partnering teams in a number of smart ways. First, Desigan Chinniah, an early developer at eBay and well-known investor who has funded various African startups, joins the firm as a venture partner. Damilola Teidi, the former director of startup support at incubation hub CcHUB, leads the business’s Platform and Networks division.
Dotun Olowoporoku is then introduced as Ventures Platform’s managing partner. A select group of tech experts who have held founder, investor, and operator positions on the continent includes Olowoporoku. He established an on-demand food delivery service in the United Kingdom ten years ago, ran Starta, an advisory firm for start-ups and scale-ups on the continent, served as a principal at the Pan-African fund Novastar Ventures, and most recently served as the chief commercial officer (CCO) at TeamApt, which is supported by QED.
In a conversation with TechCrunch, Olowoporoku remarked, “Kola and I were careful about complementing one other and adopting roles that leverage our abilities, experience, and knowledge.” “I lead on the investment process and management, market analysis and research, portfolio support, communications, and ecosystem involvement,” the leader said. He will collaborate closely with Aina as they attempt to make profitable bets to help repay this oversubscribed investment. Both partners are widely regarded as being among the most founder-friendly in Nigeria’s IT industry.