Raising Funds in Africa? Here are 10 Homegrown Venture Capital Firms You Should Know
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Raising Funds in Africa? Here are 10 Homegrown Venture Capital Firms You Should Know
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By Fiona Muithi, Research Associate, Botho Emerging Markets Group
September 21, 2020
Venture capital is a nascent but growing form of financing in African markets. Between 2014 and 2019, Africa had a total of 613 VC deals valued at US $3.9 billion. 2019 marked a record high with 139 deals valued at US $1.4 billion. Fintech dominates the African start-up scene but investments in logistics and transportation, e-commerce, healthcare and agribusiness sectors are on the rise. Today, South Africa, Kenya and Nigeria have attracted the bulk of VC investments between 2014 and 2019. As the African VC landscape continues to evolve and mature, here are 10 homegrown VCs you should know:
As the African VC landscape continues to evolve and mature, here are 10 homegrown VCs you should know:
Founded by Eric Osiakwan, an angel investor and founder of Angel Africa List and Angel Africa Fair - platforms that bring together African angel investors and innovative companies with the aim of facilitating investments. Chanzo Capital funds tech-enabled ventures in the fintech, edtech, healthtech and agritech industries in Ivory Coast, Kenya, Nigeria and South Africa. When investing, they concentrate on business models that focus on a “low margin, high volume” approach through scalable platforms. They invest between $500k and $5 million spread over various growth phases of the company from Series A to C. Chanzo Capital also makes seed investments in innovative technologies. Since launching in 2014, the firm has invested in 16 tech startups including Hubtel, Hotel Online, Oze and Farmerline.
Co-founded by Oluwaseun Oyinsan, a technology enthusiast with experience spanning across credit risk and technology valuation, Oui Capital backs pre-seed and seed-stage startups. The firm has a Mentor’s Fund, which not only provides early-stage capital but also facilitates access to high-quality mentors and advisors, filling a gap faced by many founders. Oui makes approximately eight $50,000 to $150,000 early stage investments every year in post-ideation and pre-Series A companies valued below $5m with strong growth and impact potential. The fund currently has 7 companies in its portfolio ranging across a wide range of industries including Teamapt, Awa Bike, Intelligra, and Vite.
This South Africa-based fund is co-founded and managed by Pule Taukobong and Pardon Makumbe. CRE Venture Capital invests in technology-enabled startups at the seed and Series A stages. It has made 31 investments since founding in 2014. Their most recent 2020 investment was Carry1st, an African mobile gaming app that raised $2.5 million. Other notable investments include Rensource, Flexclub, Andela, Arifu, and Flutterwave.
This early-stage technology venture capital firm is based in Cape Town, South Africa and specialises in the Southern and Eastern Africa region. 4DI Capital has three funds managed by its founders, Anton van Vlaanderen, Erik van Vlaanderen, Justin Stanford and Laurie Oliver - with entrepreneurial backgrounds and angel investing experience. Their third fund, 4DI Capital Fund III, launched in 2009 and its portfolio includes early-and growth-stage investments in fintech, insureTech, healthtech, edutech and agritech such as VALR, Aerobotics, InvestSure and Zoona.
With USD $50 million in investment capital, Algebra Ventures is considered the largest VC fund in Egypt. The fund is managed by three partners, Tarek Assaad, Karim Husein and Ziad Mokhtar, with strong investment and operational experience in Egypt and the US. Over the last two years, Algebra has invested in companies like La Reina, iCommunity, Filkhedma, POSRocket, Eventtus, Halan. Its current portfolio spans 15 companies in sectors such as consumer marketplaces, core technology, transportech, fintech, and enterprise software.
Ingressive Capital, based in Nigeria, was founded by Maya Horgan-Famodu, who previously worked at JPMorgan Chase and in the private equity space. Ingressive Capital prefers to have 10% ownership in pre-seed to seed tech enabled companies based in Sub-Saharan Africa with typical cheque sizes of up to $400k. Its portfolio companies include Paystack, Tizeti, Jetstream, 54gene, OZE and many more high growth startups. In June 2020, the fund announced that it doubled the size of its investment fund to US$10 million.
Founded in 2017, V8 Capital Partners, the investment arm of V8 Group, is based in Mauritius and Nigeria and specialises in investing into technology and technology-enabled businesses across Africa. They typically invest between $250k to $5m in Series A to Pre-IPO tech companies. V8 Capital Partners was founded by Ugo Okoye and Tobi Oke, whose experience spans venture capital, private equity, and technology consulting. They have currently invested in AppZone, 54gene, Kobo360, Invest Bamboo and Bambooks, among others.
Based in Nairobi, Kenya, Afrinet Capital was founded by Declan Magero, a seasoned entrepreneur, researcher, investment, and business consultant. This VC firm that invests in businesses focused on opportunities in Finance, Education, Retail, Healthcare, Energy and Agribusiness. They typically invest in Series A and B investment seeking companies. Aside from providing funding support, they engage a global network of mentors from Silicon Valley and other regions to help their portfolio companies through their journeys. Some of their portfolio companies include M-Zawadi, Bidhaa Sasa and TotoHealth.
Mauritius-based Savannah Fund was founded in 2012 by Mbwana Ally, an experienced product manager within consumer web, enterprise software and SaaS. This seed capital fund specializes in $50k - $1 million investments in early-stage, high growth technology startups across Africa. Since 2012, they have made 31 investments in Ethiopia, Ghana, Kenya, Nigeria, South Africa, Uganda and Zimbabwe, in companies such as Africa Courier Express (ACE), Aerobotics, Copia, Sendy and many more.
Microtraction is a Nigerian VC founded by Yele Bademosi in July 2017. Microtraction describes itself as a ‘sector-agnostic’ fund that focuses on investing in smart, relentlessly-resourceful founders who have ‘high-growth, technology-driven businesses in billion-dollar markets’. Their recent investments include Wallet.ng, ThankUCash, CowryWise, and Accounteer.
Despite the increased capital into the African startup ecosystem over the last decade, the ecosystem has been primarily supported by foreign capital. Of the 51 funds investing in African startups, only 22 (43%) are headquartered in Africa and managed by Africans. The recent boom in homegrown innovation highlights a demand for more funding and the 10 VC firms highlighted here are among those leading the charge.
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