▼ Summary
– Ventures Platform has raised $64 million for its second fund targeting $75 million, with Nigeria’s government making its first-ever VC investment through the iDICE program.
– The firm will expand its investment strategy to include Series A rounds and seek larger ownership stakes, addressing the region’s Series A funding shortage.
– Ventures Platform plans to deepen its presence in Nigeria while expanding into Francophone West Africa and North Africa to access earlier-stage deals.
– The VC has backed over 90 “painkiller” startups across sectors like fintech and healthtech, including notable successes like Moniepoint and Paystack that created new markets.
– Despite Africa’s funding slowdown and exit challenges, the firm attracted returning LPs by demonstrating strong fund performance and emphasizing the continent’s long-term growth potential.
Lagos-based Ventures Platform, a leading early-stage investment firm in Africa, has successfully secured $64 million for its second fund, with ambitions to reach a final target of $75 million. This significant capital injection is poised to energize the continent’s startup landscape, reinforcing the firm’s commitment to identifying and nurturing high-potential businesses across multiple sectors.
A landmark development in this funding round is the participation of the Nigerian government, marking its inaugural venture capital investment through the iDICE program. This move underscores the growing recognition of Nigeria’s vibrant startup ecosystem, which hosts the highest number of unicorn companies in Africa. Additional limited partners contributing to the fund include the International Finance Corporation, British International Investment, Proparco, Standard Bank, MSMEDA, and AfricaGrow, alongside European family offices and notable global investors like former Y Combinator CEO Michael Seibel. Impressively, 70% of investors from the firm’s first fund have reinvested, signaling strong confidence in its strategy.
Ventures Platform has earned a reputation for identifying promising Nigerian startups at an early stage, a capability it now aims to extend into other African markets. The firm launched its initial institutional fund in 2022, a $46 million pool dedicated primarily to pre-seed and seed financing. With this new fund, Ventures Platform will expand its focus to include Series A investments, adopting a more assertive approach by seeking larger ownership stakes. This shift comes at a critical time, as Series A funding has become increasingly scarce following reduced activity from Silicon Valley investors.
While deepening its roots in Nigeria, the firm is also establishing a presence in Francophone West Africa and North Africa, regions where it has already initiated several investments. This geographic expansion is designed to provide earlier access to promising ventures. To date, Ventures Platform has backed more than 90 startups throughout the continent, with a strong emphasis on what it terms “painkiller” businesses. These are companies operating in fintech, healthtech, agritech, edtech, and artificial intelligence that address critical gaps in underserved markets.
Portfolio successes include Moniepoint, a Visa-backed unicorn, and Paystack, acquired by Stripe, both fintech innovators that have dramatically expanded access to online payments and small business banking. According to founding partner Kola Aina, these companies exemplify market-creating innovation by enabling commerce and financial inclusion in previously excluded areas. Other standout investments in the portfolio are LemFi, SeamlessHR, OmniRetail, Raenest, and Remedial Health.
Despite Africa’s tech ecosystem attracting over $12 billion since 2015, stakeholders have raised concerns about a shortage of exits and liquidity events. This challenging environment has made fundraising difficult for many venture capital firms, particularly emerging managers. Nevertheless, Ventures Platform has successfully attracted both local and international limited partners through two separate funds, even amid market volatility.
Aina attributes this success to supportive limited partners who recognize the long-term development trajectory of venture ecosystems, as well as the firm’s practice of recycling capital from earlier syndicates. He also notes that the first fund ranks among the top global performers based on key financial metrics. Addressing broader concerns about Africa’s funding slowdown, which saw investment drop from $5 billion in 2021 to $2 billion last year, Aina remains optimistic about the continent’s long-term potential.
He describes Africa as a “pure asymmetric play for non-consensus alpha,” highlighting its high-risk, high-reward profile. By 2050, one in four people globally will be African, and the region’s GDP growth rate is double that of the United States. Aina emphasizes that the vast majority of value remains offline, presenting enormous opportunities for patient investors with local insight. For global capital allocators seeking true diversification, he asserts, Africa represents an unparalleled frontier.
(Source: TechCrunch)