Platform for Ventures
As mentioned by Techcrunch
Ventures Platform, based in Lagos, one of Africa’s most active early investors, has already raised $64 million for its second fund and is targeting a close of around $75 million, co-founder and partner Kola Aina told TechCrunch.
Among the investors is the Nigerian government through the Investment in Digital and Creative Enterprises (iDICE) program, which marks the government’s first venture capital fund investment. This is significant because the Nigerian startup ecosystem has the largest number of ‘unicorns’ on the continent.
Other limited partners of Ventures Platform’s second fund include IFC, British International Investment (BII), Proparco, Standard Bank, MSMEDA and AfricaGrow, as well as European family offices such as Alder Tree Investment, and notable global backers, including former Y Combinator CEO Michael Seibel. Aina noted that 70% of the investors from the previous fund have returned.
Nigeria is choosing this company for its debut investment – perhaps not surprising. Since its founding in 2016, Ventures Platform has built a reputation for identifying breakthrough startups in the country at an early stage, and hopes to replicate that success in other African markets.
Ventures Platform launched its first institutional fund of $46 million in 2022, with a focus predominantly on pre-seed and seed rounds.
With the second fund, the company also plans investments in Series A, while “investing with more confidence” and seeking larger ownership stakes, Aina said. This should be good news for founders in the region, as Series A funding has become more challenging after years of pullbacks from Silicon Valley companies.
While Ventures Platform plans to deepen its presence in Nigeria, the company has also begun forming a presence in Francophone West Africa and North Africa – regions where several investments have already been made, in order to gain earlier access to promising deals.
Portfolio and Investment Dynamics
To date, the pan-African venture capital fund has financed more than 90 startups across the continent. Most of these investments are ‘thorny’ businesses in fintech, healthtech, agritech, edtech, and AI – companies solving the problem of inaccessibility of services or products in remote regions.
Aina points to portfolio companies Moniepoint (a Visa-backed unicorn) and Paystack (owned by Stripe), two fintech companies that opened new markets for online payments and banking for small businesses.
“Many small businesses have struggled to sell beyond their immediate surroundings to Paystack, because they could not accept online payments,” he said. “Moniepoint, on the other hand, has brought financial inclusion to every corner of this country. This is market creation through innovation.”
Other notable companies in the portfolio include LemFi (remittance, Left Lane), SeamlessHR (Gates Foundation), OmniRetail (Norfund), Raenest (QED) and Remedial Health (healthtech).
Even in the pace of innovation and growth of funding in Africa’s tech ecosystem, which has surpassed $12 billion since 2015, market participants express concerns about a lack of exits and liquidity events. This makes fundraising more challenging for many VCs on the continent, especially for first-time managers who have faced a tough climate over the last two years.
Nevertheless, over this period Ventures Platform managed to attract both local and international LPs for two funds, despite market uncertainty.
“We have LPs who understand how venture ecosystems have evolved in other markets and know that we will get there in the long term. Another reason is that we reinvested capital from our previous syndicates,” Aina said, referring to the fund returning four of six rounds (including five angel syndicates) between 2016 and 2022. The investor also stated that the first fund ranks among the world’s best in TVPI and IRR for its vintages.
“If you’re a global allocator of capital seeking true diversification, Africa is the place,” he said. “By 2050, one in four people will be African. Our GDP growth rate is twice that of the US, and yet most of the value remains offline. The opportunities are vast if you have patience and an understanding of the local context.”
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