Ventures Platform goes bigger — and broader — with its second Africa fund
Ventures Platform has raised an $83 million second fund to back early-stage founders across Africa, expanding beyond its home market of Nigeria with a strategy shaped by a tougher, more selective venture market.
Intelligence analysis by Llama
Ventures Platform has raised an oversubscribed $83 million second fund to back early-stage founders across Africa, expanding beyond its home market of Nigeria. The firm plans to back founders in fintech, healthcare, SaaS, and other areas where technology can address essential needs and build large, enduring businesses.
Imagine you have a lemonade stand, and you want to grow it into a big business. Ventures Platform is a company that helps other companies, called startups, grow and become successful. They just raised a lot of money to help more startups in Africa, which is a big deal because it means more people will have access to important products and services.
Analysis
Fundraising Environment
The fundraising process for Ventures Platform's second fund took about a year and a half, with the firm's founding partner, Kola Aina, describing the environment as more "selective" than it was when the firm raised its first fund in 2022. This selectivity is a result of LPs demanding more evidence that managers can turn portfolio value into realized returns, especially after many LPs felt burned by the venture bust a few years ago.
Capital Efficiency
Aina noted that the result of this selectivity is a much greater appreciation for capital efficiency, stronger fundamentals, governance, regulatory engagement, and the importance of building businesses that can survive different funding cycles. This is a healthy development for the market, as it means that LPs are no longer assuming that capital is unlimited and that managers can simply raise successive rounds of capital to build valuable companies.
Edge of the Firm
Aina believes that the biggest edge his firm offers is its combination of local depth and global connectivity. This is increasingly important as the ecosystem matures, and it allows the firm to connect companies to regional and global networks as they scale. This pitch seems to have resonated with existing investors, as 70% of Fund I's LPs returned for Fund II.
Backers
The firm's backers include the European Bank for Reconstruction and Development, Norfund (Norway's development finance institution), and Ghana's Ashesi University Foundation. Aina noted that the firm doesn't take the return of these investors for granted, and that it is a testament to the firm's ability to demonstrate its approach to early-stage investing in Africa at an institutional scale.
Key points
- Ventures Platform has raised an oversubscribed $83 million second fund to back early-stage founders across Africa.
- The firm plans to back founders in fintech, healthcare, SaaS, and other areas where technology can address essential needs and build large, enduring businesses.
- The fundraising process took about a year and a half, with the firm's founding partner, Kola Aina, describing the environment as more "selective" than it was when the firm raised its first fund in 2022.
- The firm's backers include the European Bank for Reconstruction and Development, Norfund (Norway's development finance institution), and Ghana's Ashesi University Foundation.
If Ventures Platform's second fund is successful, it could lead to more African startups attracting capital and attention from investors, which could in turn drive economic growth and development on the continent. This could also lead to more innovation and job creation, as startups grow and become successful.
However, the venture market is still a high-risk, high-reward environment, and there is a risk that some of the startups backed by Ventures Platform may not succeed. This could lead to losses for the firm and its investors, and could also damage the reputation of the firm and the venture market as a whole.
