Oui Capital, a pan-African early-stage VC agency, hits first shut of its $30M second fund – Thealike

Oui Capital, an Africa-focused VC agency primarily based in Lagos and Massachusetts, introduced at present that it has accomplished the primary closing of its $30 million second fund, Oui Capital Mentors Fund II, because it seeks to strengthen its presence on the continent. 

The agency, based in 2019 by Olu Oyinsan and Francesco Andreoli, launched its debut fund at $10 million. Since then, Oui Capital has made 18 investments in know-how sectors spanning completely different industries equivalent to fintech, logistics & mobility, e-commerce, healthcare, and enterprise software program. Some names embody TeamApt, MVX, Akiba Digital, Duplo, Ndovu, Maad, Intelligra, Aifluence and Pharmacy Marts. 

Oui Capital made eight investments final yr and this second fund alerts the VC’s intention to maintain up with that tempo. The $30 million fund, identical to the primary, will again sub-Saharan startups within the pre-seed and seed phases. So far, the agency has reached its first shut at just a little over $11 million and expects to finish the ultimate shut by This autumn 2022. 

Managing companion Oyinsan, in an interview with Thealike, stated Oui Capital’s first fund delivered early stable returns, with a MOIC (a number of on invested capital) in extra of seven instances. He stated that one of many explanation why the agency managed to perform this lies within the “sparks” that decide which startup to put money into or not: staff, market, data of the client and tech, and buyer enthusiasm. 

But regardless that corporations observe a guide (like Oui Capital and its aforementioned funding methods), not all offers end up nice finally. Oui Capital offers extra in depth help for a few of these startups by driving partnerships and gross sales, facilitating hires and offering bridge investments. With respect to follow-on capital, the managing companion stated Oui Capital makes such investments proactively as a part of the agency’s ongoing portfolio monitoring. As it stands, Oui Capital has made follow-on investments in about 20% of its portfolio corporations. 

“We go the extra mile with founders whom we partner with and this is why we maintain a relatively smaller portfolio compared to many seed funds. However, there is a critical distinction between the responsibilities of a VC as an investor and as a fund manager,” he added. “Being an investor begets the type of die-hard optimism and support as earlier described. Being an effective fund manager also puts the fiduciary responsibility on you to know when to stop devoting scarce resources to problems that might prove too difficult to fix and dedicate these resources to higher-performing companies in your portfolio to minimize losses and maximize investor value.”

Though financial cycles just like the one the startup world is experiencing are normally quick to medium-term, Oyinsan echoes what native traders have communicated these previous few months: the return of sticking to first ideas and backing corporations with robust fundamentals, unit economics, and disciplined valuations. This occasion has created a possibility for traders, together with Oui Capital, to speculate up the chain, particularly now that it has newly infused capital. According to Oyinsan, the agency shall be trying to cowl the total spectrum of investments earlier than Series A, together with bridge rounds, an exercise it can amplify, significantly throughout this enterprise capital crunch. In relating news, Zedcrest Capital, one other agency, launched a $10 million ’emergency fund’ to bail out startups in pre-Series A phases final week. 

From this new fund, Oui Capital intends to write down preliminary checks of as much as $750,000 (a 10x enhance from its ticket measurement when it launched its first fund) with reserves in place for such follow-on investments. “Expect us to be leading many more deals across the ecosystem and vocalizing firm initiatives — all things that we’ve been doing quietly in the past four years, but now looking to double down on these with the new fund,” Oyinsan added. 

Oui Capital’s second fund welcomed a mixture of particular person and VC traders as restricted companions. Individual traders equivalent to Brad Feld, Seth Levine and Ryan McIntyre (Foundry Group’s companions), Gbenga Oyebode, Alitheia Capital’s Tokunboh Ismael, Idris Alubankudi, and TeamApt CEO Tosin Eniolorunda participated. 

As one of many largest fintechs in Africa (by way of income and market capitalization), TeamApt is, for now, the breakout success of Oui Capital’s portfolio. The fintech, which in keeping with sources, is available in the market to lift a Series C spherical subsequent yr, stands as one of many continent’s touted soonicorns. Thus, Eniolorunda changing into a restricted companion on the agency is worthy of admiration as it’s such a uncommon feat in these components for founders to turn into LPs within the funds that backed their startups. Another instance is Paystack CEO Shola Akinlade and pan-African early-stage fund, Ventures Platform.

“It’s a great feedback loop for us as a VC firm and speaks to the strength of our working relationship with TeamApt in the years even before our investment in the company,” Peter Oriaifo, principal at Oui Capital, informed Thealike on Eniolorunda’s LP participation. “The founder-investor relationship is a testament of our work to back a founder at the seed stage and to see the company succeed to a point where they want to pay it forward.”

Oui Capital invested in TeamApt when the fintech firm was beneath the radar and earlier than attracting the eye of different traders. Its success is without doubt one of the inspirations behind Oui Capital’s pan-African strategy; the agency needs to make novel investments into startups it believes can turn into winners of their respective nations and sectors. Oui Capital highlights Maad (the primary B2B market for fast-moving client items in Senegal ) and Pharmacy Marts (a B2B market for pharmacies in Egypt) as examples.

This technique has elevated the African nations the place Oui Capital has made not less than one funding: Nigeria, Kenya, Senegal, Egypt, and South Africa. The agency plans to make extra investments in North Africa and Francophone Africa, areas that witnessed rising startup and enterprise capital exercise final yr when African tech funding hit file highs in correlation with international numbers.

“Our pan-African strategy has made us a fund of choice for global LPs looking for exposure to the broader Africa opportunity without having to get into the weeds of understanding different regions separately,” acknowledged Oyinsan. The international VCs concerned on this second fund embody Angur Nagpal’s Vibe Capital, D Global ventures, Boston-based One Way Ventures and Ground Squirrel Ventures.

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