Key facts
- Ventures Platform has raised an $83 million second fund.
- The fund is oversubscribed and larger than its predecessor.
- The firm is expanding its investment mandate beyond Nigeria to other African markets.
- Investments will target early-stage companies in sectors including fintech, healthcare, SaaS, and AI.
- Check sizes will range up to $3 million.
- 70% of investors from the first fund re-invested in the second fund.
Ventures Platform, a Pan-African venture capital firm, has successfully raised an oversubscribed $83 million second fund, surpassing its initial target. This expansion signifies a broader strategy beyond its home market of Nigeria, reflecting a more selective venture capital landscape.
The firm plans to invest in early-stage technology companies across various sectors, including fintech, healthcare, and SaaS, with a particular emphasis on how AI can fundamentally alter business models and reduce operational costs in African markets. Kola Aina, the founding partner, highlighted that AI is most compelling when it enables entirely new cost structures or market approaches, rather than just serving as a feature.
Fund II is larger than its predecessor, which raised $46 million in 2022 and focused primarily on pre-seed and seed rounds within Nigeria. The new fund broadens the geographic mandate, with initial investments already made in companies based in Kenya, South Africa, and Egypt. Check sizes for Fund II will be up to $3 million, with the capital expected to be deployed over the next three to four years.
Aina described the fundraising environment as more challenging than for Fund I, with limited partners (LPs) posing more rigorous questions regarding performance, portfolio construction, liquidity, and manager differentiation. He noted a shift from abundant capital to a greater demand for capital efficiency, strong fundamentals, and businesses capable of navigating various funding cycles. The market now prioritizes demonstrable returns over simply raising successive rounds of capital.
African startups have seen a slowdown in funding, with approximately $930 million raised across over 200 deals this year, compared to $1.16 billion across 447 deals last year. Aina views this market discipline as healthy, shifting the conversation from 'Why Africa?' to 'Why you and how will you generate returns?' He stressed the importance of local expertise combined with global connectivity for scaling companies.
The firm's strategy resonated with existing investors, as 70% of Fund I's LPs returned for Fund II. Notable backers include the European Bank for Reconstruction and Development, Norfund, and Ghana’s Ashesi University Foundation.