Early Stage Pan-African Company Ventures Platform Closes Fund, Hits $46M • businessroundups.org

Ventures platforman early-stage Pan-African venture capital firm, has closed its fund at $46 million as it looks set to double down on “leading” companies across the continent.

The six-year-old company, which employs 11 people, initially went to market to raise $40 million for this fund and reached an undisclosed initial close last December. Most of its limited partners on initial close were primarily based in Africa, which the founder and general partner said was a deliberate effort Cola Aina.

“It was strategic for us to get local capital for our first close. But the second close, as you will see, will be from global fund of funds and DFIs where we have commitments,” he said in the December interview. “While foreign capital is ultimately critical, I think it’s in foreign capital’s best interest to be in bed with local capital from a risk mitigation standpoint.”

Ventures Platform not only exceeded its initial goal, but also came up with the goods related to its next set of limited partners. Standard Bank, Africa’s largest bank by assets, is one of the fund’s newest LPs, as are four development finance institutions (DFIs): the International Finance Corporation (IFC), the British International Investment (BII), Proparco with FISEA and AfricaGrow, a fund of funds managed by Allianz Global Investors. Other limited partners include social impact company A to Z Impact, corporates, commercial banks, global institutional investors, and high net worth individuals (HNIs).

“No other fund of our kind in the region has four DFIs as LPs,” Aina informed businessroundups.org of the addition. “It’s great to have this diverse mix, which is important on several fronts, because we can lean on their experience and provide long-term capital to our portfolio companies.”

Ventures Platform has made more than 60 investments since its launch in 2016 in sectors such as fintech, insurtech, health tech, edtech, agritech, enterprise SaaS, digital infrastructure and digital talent accelerators. Some notable names from the portfolio include Marketforce, Mono, PiggyVest and Nomba and Reliance HMO, two of YC’s most valued African startups.

The majority of these investments were made in the pre-seed and seed phase. However, since this fund’s initial close, Ventures Platform, which made a full exit during the sale of Paystack to Stripe, has stepped up its game and is now cutting Series A checks for its portfolio companies, some of which have direct access to follow-on capital (Series B up ) of the company’s limited partners. Aina noted that the early-stage Abuja and Lagos-based company plans to lead pre-seed and seed rounds, investing an average of $250,000 as it participates and writing follow-up checks of more than $1 million at Series A rounds.

The closure of this fund comes at a time when deal flow activity in Africa has slowed due to the pullout of local and international venture capitalists amid rising interest rates and reversals in public markets worldwide. This state of affairs is evident in the numbers of venture capital registered in both years. African startups, for example, raised just over $5 billion, a figure many believed would be significantly surpassed by early 2022; however, as we count down to the end of the year, it looks like the figure will be maintained or slightly increased.

Startups are doing everything they can during this period to extend their runways as long as possible and to optimize their combustion. And while Ventures Platform has provisions to support and scale its portfolio companies in times like these through a value-added path called “Platform and Networks”, Aina, like many investors, is pleased with the current reset in the African fundraising environment .

“In recent years, especially in 2020 and 2021, there has been a lot of pressure to speed up processes. But now we’re very happy to be where the market is as we see valuations normalizing and velocity is more reasonable,” said the managing partner. “So we are able to do due diligence and governance well. We’re much more mindful with the type of founders we support because it’s a long-term partnership, considering the business models and the economy and making sure we have enough capital reserves to support our businesses.

Last December, Aina said Ventures Platform was strengthening its business in other markets outside Nigeria, actively seeking opportunities in regions such as Kenya, Egypt and francophone West Africa. The update is that the company has supported 20 startups in the past year, some of them from Senegal, Kenya, Uganda and South Africa.

Ventures Platform has also made a series of strategic team additions at the partnership and senior management levels. First, Damilola Teidithe former director of startup support at incubation hub CcHUB, heads up the company’s Platform and Networks team and Design Chinniahan early engineer at eBay and a well-known investor who has backed some African start-ups joins the company as a venture partner.

Dan welcomes the Ventures Platform Dotun Olowoporoku as managing partner. Olowoporoku is on a small list of tech professionals who have held positions as founder, investor and operator on the continent. He launched an on-demand food delivery platform in the UK a decade ago, ran Starta, a consultancy for startups and scale-ups on the continent, served as a director at pan-African fund Novastar Ventures, and most recently served as chief commercial officer (CCO) at QED-backed TeamApt.

“Kola and I were eager to complement each other and assume roles that leveraged our strengths, experience and expertise,” Olowoporoku said in an interview with businessroundups.org. “I am primarily responsible for leading investment process and management, market analysis and research, market analysis and research, portfolio support, communications and ecosystem engagement.” He will work closely with Aina as both partners, widely regarded as some of the most founder-friendly in Nigeria’s tech ecosystem, seek lucrative bets to help pay back this oversubscribed fund.