From InstaDeep to Paystack: Here are Africa's biggest startup exits and how much they raised

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african founders

Image Credits: Bryce Durbin / TechCrunch

Startups globally have faced challenges over the last couple of years when trying to exit, due to factors like a frozen IPO market and reduced attractiveness to buyers. In addition, large mergers-and-acquisitions (M&A) deals have faced heightened regulatory scrutiny, particularly involving Big Tech or multi-billion-dollar conglomerates.

Notably, a decline in venture investment within any startup ecosystem can often be linked to a lack of exit volume and value. In Africa, for instance, the number of M&A exits peaked at 44 in 2021, when the continent attracted nearly $6 billion in venture capital. However, in 2022, the number of exits dropped to 29, alongside a decrease in venture capital investment to over $3 billion.

Despite these challenges, local investors remain optimistic, saying that M&A activity will eventually pick up as founders and investors seek liquidity in an increasingly tough market.

“We will continue to see few exits (IPOs) in 2024, given that many companies scaled down growth to adjust to the reduction in capital availability. But we will likely see more consolidations and M&A activity as undercapitalized companies seek to benefit from the value they have created on a larger platform,” TLcom Capital partner Andreata Muforo told TechCrunch in an interview last year. 

Yet, the debate continues over whether the African tech ecosystem has lived up to expectations or underperformed regarding exit outcomes (M&As and IPOs) relative to the venture capital invested: over $20 billion. One perspective argues that the number of exits doesn’t justify the capital infusion, while another emphasizes that even a few landmark exits are commendable given the ecosystem’s relative youth.

Expensya stands as one of Africa’s landmark exit stories, demonstrating the potential for significant returns even within a young and emerging tech ecosystem. Having raised slightly over $20 million, the Tunis- and Paris-based expense management startup was acquired by the private equity firm Medius, resulting in a cash-out of $10 million for its employees. The exit was valued at 1.5 times its last reported valuation of $83 million, according to PitchBook.

This acquisition is particularly significant in the context of the African tech ecosystem, where the terms of M&A deals are often shrouded in secrecy. The lack of transparency around these transactions makes it challenging to gauge the true performance of the continent’s tech sector. However, when details are disclosed or found out, as in the case of Expensya, they provide valuable insights that help inform valuation and pricing strategies, allowing stakeholders to better align their expectations.

As we continue to monitor the growth of Africa’s tech ecosystem, it’s essential to highlight and analyze the biggest disclosed acquisitions. These landmark exits, often disclosed, offer a clearer understanding of the continent’s progress and potential in delivering value through M&A activity.

InstaDeep

Founded by Karim Beguir and Zohra Slim in 2014, enterprise AI startup InstaDeep uses advanced machine learning techniques to bring AI to applications within an enterprise environment. The Tunis- and Paris-based startup raised over $108 million from investors, including BioNTech, Alpha Intelligence Capital, Endeavor Catalyst and Google.

Acquirer: BioNTech (2023)Exit: €500 million ($550 million) in cash and stock.

Sendwave

Drew Durbin and Lincoln Quirk founded Sendwave in 2014 to offer money transfer services from countries in North America and Europe to those in emerging markets: Africa, Asia, and the Americas. The YC-backed Sendwave raised over $15 million from Founders Fund, Khosla Ventures, Serena Ventures, and Partech. 

Acquirer: Zepz (2020)Exit: $500 million in cash and stock. 

MainOne

MainOne is a data center and connectivity solutions provider serving clients from technology enterprises to cloud service providers across West Africa, particularly Nigeria, Ghana, and Ivory Coast. Founded by Funke Opeke in 2010, the Lagos-based Equinix subsidiary raised over $200 million in equity and debt before its acquisition. 

Acquirer: Equinix (2021)Exit: $320 million all-cash transaction.

DPO Group

Eran Feinstein founded the payment gateway DPO Group in 2006. The Nairobi and Cape Town-based fintech provides payment services to thousands of merchants across multiple African countries. It raised over $15 million from Apis Partners and other investors.

Acquirer: Network International (2020)Exit: $291 million in cash and stock ($228.6 million cash).

Paystack

Shola Akinlade and Ezra Olubi launched Lagos-based Paystack in 2015 as a payment processing platform for African merchants to accept online payments via debit card and direct bank transfer. The YC-backed startup — arguably the first from the continent to graduate from the accelerator — raised over $12 million from Stripe, Visa, Tencent and Ingressive Capital.

Acquirer: Stripe (2020)

Exit: $200 million+ cash-and-stock.

Expensya

Expensya, founded by Karim Jouini and Jihed Othmani, provides smart payment card solutions to automate spend management for businesses across Europe. The Tunis-based software company raised $25 million from Bpifrance, ISAI and Silicon Badia. 

Acquirer: Medius (2023)Exit: ~$120 million+ cash and stock, per sources.

Fundamo

The Cape Town-based Fundamo was a platform that delivered mobile financial services, including person-to-person payments, airtime top-up, bill payment, and branchless banking services, to unbanked and underbanked consumers. The fintech, founded by Hannes van Rensburg in 2000, raised $5 million from South African investors, including Knife Capital. 

Acquirer: Visa (2011)Exit: $110 million cash deal.

PaySpace

Bruce, Clyde, Warren Clark and George Karageorgiades founded Johannesburg-based PaySpace in 2007 as a cloud-based payroll and HR platform to streamline payroll runs and backup procedures. The bootstrapped startup raised undisclosed venture for the first time last year from local payments solutions provider Netcash before its acquisition. 

Acquirer: Deel (2024)Exit: ~$100 million+ cash and stock.

Google's first Africa cloud region now operational

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The Google Cloud logo on tan background

Image Credits: Sean Gallup / Getty Images

Google has today said its cloud region in South Africa is operational, coming a year after the tech giant picked Johannesburg as its first site in Africa.

Cloud regions allow users to deploy cloud resources from specific geographic locations or closer to customers, and gives them access to several services including cloud storage, compute engine and key management systems.

Google says the Johannesburg region will play an important role in providing the resources that businesses “need to scale, innovate and compete in the global marketplace.”

Google picks South Africa for its first cloud region in Africa

Today’s announcement follows the 2022 proclamation where Google also confirmed building Dedicated Cloud Interconnect sites, which link users’ on-premises networks with Google’s grid, in Nairobi (Kenya), Lagos (Nigeria) and South Africa (Capetown and Johannesburg), to provide full-scale cloud capabilities for its customers and partners in Africa. It said it would tap its now completed private subsea cable, Equiano, which connects Africa and Europe to power the sites.

“Like all Google Cloud regions, the Johannesburg region is connected to Google’s secure network, comprising a system of high-capacity fiber optic cables under land and sea around the world. This includes the recently-completed Equiano subsea cable system that connects Portugal with Togo, Nigeria, Namibia, South Africa, and St. Helena,” Google Cloud Africa director, Niral Patel said in a statement today.

According to AlphaBeta Economics research, commissioned by Google Cloud, the South Africa cloud region is expected to contribute over $2.1 billion to South Africa’s GDP, and support the creation of more than 40,000 jobs by 2030.

Besides, Patel said in 2022, the cloud region would allow its customers and partners to choose where to store their data, and regions to access its cloud services, especially in the context of data sovereignty.

The ability for users to choose where to store their data is increasingly critical as countries like Kenya implement privacy and data laws that require companies to store and process data collected within their borders using locally hosted servers.

Google, which now has a global network of 40 cloud regions and 106 zones worldwide, joins Amazon Web Services (AWS), Microsoft Azure and Oracle amongst others with cloud regions in South Africa.

Money flying off stack of bills in man's hand

Africa-focused funds find their feet amid a downturn

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Money flying off stack of bills in man's hand

Image Credits: PM Images (opens in a new window) / Getty Images

In the midst of a funding downtime last year, and with conditions getting tougher for fund managers raising capital as backers (limited partners) enhanced their focus on strategy and track record, some new African and Africa-focused funds still emerged, with several of the existing ones receiving fresh backing.

Among the notable VC funds that came up last year include the $300 million Partech Africa II, the largest Africa-focused fund to date, and Africa People + Planet fund by Novastar Ventures, an over $200 million pool that will invest in agriculture and climate sectors. Meanwhile, Norrsken22, one of the biggest VCs in Africa, got fresh backing for its Norrsken22 African Tech Growth Fund, alongside the final closing of its debut fund.

New VCs also continued to surface, including Chui Ventures, which has a gender-inclusive focus in its plan to back founders in Africa focused on mass-market products. Its maiden fund bagged $9 million backing from Mastercard, to serve a market that has recently received clamor for local capital.

Africa’s venture capital and private equity fund managers secured $2.4 billion across 43 deals across the year, according to data tracker and market insights firm Briter Bridges’ latest report.

Looking ahead, in 2024, what investment opportunities are new funds and VCs tapping in Africa? Brian Odhiambo, a partner at Novastar Ventures, said opportunities abound in fintech and climate sectors.

African climate startups set to gain ground as VC funding shifts their way

“We believe that the megatrends in Africa are the reason to keep investing. Africa has the world’s youngest and fastest growing population, all of whom are increasingly tech savvy. We currently have the largest available arable land and the largest carbon sink in the world outside of the Amazon. Urbanization in Africa is also the fastest growing in the world.”

Odhiambo, particularly, sees enormous scope for disruption in the energy and agricultural industries noting that “much of the continent’s population is still underserved by existing energy providers and will need alternative sources of power for domestic and productive use. As the continent continues to diversify, agriculture presents a big opportunity for technological disruption. We are especially interested in technologies that help make food production efficient and sustainable.”

Chui Ventures’ managing partner, Joyce-Ann Wainaina, an ex-Citi executive, who launched a gender-inclusive VC fund last year, also sees an opportunity to tap world’s largest intercontinental free trade area, and African women, who she says are “the most entrepreneurial in the world.”

Why international DFIs are looking to African startups to scale impact investing efforts

 

More to come

As the year progresses, Ms. Wainaina expects new funds to emerge and existing ones to get capitalized. Already, Seedstars Africa Ventures has received $40.5 million fresh backing from EIB Global and AfdB and Rally Cap, an early-stage venture capital firm focused on emerging markets in fintech, has made inroads into the climate sector with a new fund.

“I believe that we will see a lot more local VC funds emerging in Africa, to meet the capital needs in the market. There is a real need to support local entrepreneurs as formal employment opportunities in Africa cannot absorb the large numbers entering the job market each year. The continent will need a lot more VC funding to address this gap. Local VCs will provide stability particularly when global market sentiments are low. I remain hopeful about the future of VC in Africa,” said Ms. Wainaina.

Homegrown African VCs emerge to fill in the gaps foreign investors cannot

Below we outline funds that emerged or got capitalized last year.

VC funds

Partech Africa II

Partech Africa is one of the most active VCs in Africa that invests in tech startups building solutions for economic sectors that are “usually highly fragmented and informal in Africa.”

The Partech Africa II fund reached its first close of $263 million last year, to invest in startups in various sectors including fintech, health tech, logistics, mobility and edtech. The second fund succeeds its first fund announced in 2018.
Fund size: $300 million
Target: Focuses on seed to series C rounds

Partech hits first close of largest Africa-focused fund, at €245M

Africa People + Planet Fund

Novastar Ventures’ new fund will back sustainable, planet-positive, mass-market business models across Africa. The fund got $25 million backing from the U.S International Development Finance Corporation (DFC). The pan-African VC firm also got $40 million in multifund commitment from SBI Holdings, a Japanese financial services conglomerate and one of the largest venture capital firms in the East Asian country.
Fund size: Over $200 million
Target: The fund targets climate and clean techs, marketplaces and initiatives that contribute to community resilience through the delivery of financial and supply chain services.

DFC invests $25M in Novastar’s Africa People + Planet Fund

Founders Factory Africa
Founded in 2018, FFA provides funding and hands-on support to early-stage founders building local solutions to local challenges in South Africa, and it is backed by corporate and impact investment partners.

The South African early-stage accelerator and investor raised $114 million in funding last year. It plans to continue investing in startups in its main fields of focus that include fintech, agtech and health startups but are also keen on others that include logistics tech, e-commerce clean tech, enterprise tech and HR recruitment.
Fund size: $114 million
Target: Early-stage startups.

Founders Factory Africa to deploy $114M using learnings from past programs

Africa Innovation & Healthcare Fund 2
The AHF2 fund is managed by AAIC Investment, which has supported investment activities of Japanese CVCs since 2017. It launched the Africa Innovation & Healthcare Fund 2 in 2022, which attained a second close last year to reach $40 million. Its initial fund reached $47 million.
Fund size: $150 million
Target: The fund will invest in Series A and B companies in Kenya, Nigeria, South Africa and Egypt in medical and healthcare sectors and tech companies in social infrastructure fields including finance, insurance and logistics.

Al Mada Ventures
Al Mada Ventures (AMV) is a venture capital firm spin-out of Morocco’s Al-Mada holdings, one of Africa’s largest private investment funds. Its portfolio companies include Susu, a French- and Ivorian-based health tech.
Fund size: $110 million
Target: The evergreen fund will address a gap in growth-stage companies in financial services, health, logistics, renewable energy, mining, distribution, retail, education and telecom sectors.

Al Mada Ventures, the $110M fund for Africans by Africans

Saviu fund II
Saviu Ventures is a Francophone Africa VC, launched in 2018. Its second fund made an initial close of €12 million last year, and has so far backed Waspito, a Cameroonian health tech; Rubyx, a Senegalese digital lending SaaS provider; and Workpay, an HR-payroll provider.
Fund size: $32 – $54 million
Target: Seed-stage startups mainly in fintech, health tech and climate tech sectors.

Saviu Ventures’ second fund reaches €12 million first close to back Francophone Africa startups

Chui Ventures
Chui Ventures is a pan-African VC investing in early-stage startups. It was launched last year and its maiden fund has already gotten $9 million backing from Mastercard’s Africa Growth Fund
Fund size: Over $10 million
Target: It has a gender-inclusive focus and is backing African founders building mass-market solutions.

Sony Innovation Fund: Africa (SIF: AF)
Sony Ventures Corporation (SVC), the Japanese tech giant’s venture arm, last year set aside a $10 million fund to invest in African entertainment startups. It recently invested in African gaming startup Carry1st.
Fund size: $10 million
Target: Early-stage startups in gaming, music, film and content distribution.

Sony Ventures earmarks $10M to invest in African entertainment startups

P1 Ventures
P1 Ventures was launched in 2020 and reached the first close of its second fund at $25 million last year. Its investees from the first and second fund include, Gameball, Reliance Health, Nkoloso.ai, Chari, Djamo and Yassir.
Fund size: Unknown
Target: P1 is investing in e-commerce, fintech, insurtech, health tech and SaaS and AI startups. The VC firm regards itself as a multistage investor.

Pan-African contrarian investor P1 Ventures reaches $25M first close for its second fund

E3 Low Carbon Economy Fund for Africa (E3LCEF)
The E3LCEF is a climate-tech fund by early-stage VC E3 Capital (formerly Energy Access Ventures), and emerging markets-focused investment bank Lion’s Head Global Partners. It reached a first close of $48.1 million last year.
Fund size: $100 million
Target: It targets solar providers and EV startups in sub-Saharan Africa.

E3 Capital and Lion’s Head climate fund hits first close at $48M to back African startups

Equator
Equator is a climate tech venture capital firm focused on sub-Saharan Africa keen on seed and Series A startups. The VC firm, which emerged publicly last year, had an initial $40 million close last year and has so far invested in SunCulture, Apollo Agriculture, Odyssey Energy Solutions and Roam.
Fund size: Unknown
Target: Equator is backing seed and Series A startups in energy, agriculture and mobility sectors.

Equator secures $40M in commitments for fund targeting climate tech startups in Africa

Catalyst Fund
The pan-African early-stage fund was founded in 2016 as a pre-seed accelerator addressing challenges such as funding, talent and market access for startups; however, in 2022 it switched from an accelerator to a VC fund and reached a first close of $8.6 million last year. Its investees include Octavia Carbon, a direct air carbon capture startup, and Sand to Green, which is transforming deserts into arable lands.
Fund size: $40 million
Target: Climate related startups including agtechs, insurtechs, climate fintechs and startups in fishery management, food systems, cold chain, waste management and water management.

Catalyst Fund reaches first close to back climate-tech startups in Africa

Verod-Kepple Africa Ventures
VKAV is a pan-African fund launched in 2022 as a joint venture between Verod Capital, a private equity firm and Kepple Africa, a Tokyo-based venture capital firm. It reached a $43 million second close in March last year and secured a further $10 million investment months later from Japan’s ICT and Postal Services (JICT). It has so far invested in 11 startups including Cloudline, Chefaa and Moove.
Fund size: $100 million.
Target: To invest in Series A and B fintech, e-commerce and logistics ventures across Africa.

Backed by Japanese investors, Verod-Kepple’s fund will invest in Series A and B startups across Africa

VestedWorld
VestedWorld is an early-stage VC that mainly invests in Ghana, Kenya and Nigeria. Last year it got $10 million backing from Mastercard Africa Growth Fund.
Fund size: Unknown
Target: It mainly invests in agribusinesses, consumer products and technology-enabled businesses mainly in Ghana, Kenya and Nigeria. Its secondary target markets are Ethiopia, Rwanda, Tanzania and Uganda.

DisrupTech
DisrupTech fund was launched in 2021 to back fintech and fintech-enabled companies like insurtechs and e-commerce startups. French DFI Proparco announced a $5 million backing into DisrupTech Ventures last year.
Fund size: $36 million
Target: To back early-stage ventures in Egypt’s fintech sector.

Enza Capital funds

Enza is a pan-African multi-stage VC. The VC firm closed $58 million across two funds, including Enza Growth Capital launched in 2022, last year.
Fund size: Unknown
Target: fintech, logistics, health, human capital and climate tech companies.

African VC firm Enza Capital launches founder partner program as it closes $58M across funds

REdimension Real Estate Technology and Sustainability Fund I

It is the first fund by South Africa proptech VC REdimension Capital that reached a first close of $10 million last year after its launch in 2021.
Fund size: Unknown
Target: Proptechs digitizing the real estate sector in South Africa.

SA SME Fund
It is a fund for funds providing much needed liquidity to later-stage VC funds in South Africa to foster entrepreneurship in the country.
Fund size: $30 million
Target: VC fund managers in South Africa

Funds that had final closes

Norrsken22 African Tech Growth Fund
Norrsken22 African Tech Growth Fund was launched in January 2022, and reached the final close of $205 million last year. Its investees include digital banking platform TymeBank, B2B commerce retail platform Sabi, identity verification solution Smile Identity, auto financing platform Autochek and SME lender Shara.
Fund size: $205 million
Target: To invest in Series A and B companies developing fintech, edtech, medtech [health tech] and market-enabling solutions.

Norrsken22’s debut fund closes at $205M to back growth-stage startups in Africa

Knife Capital III
The South African growth-stage investor Knife Capital announced a final close of its third fund, launched in 2021, last year to invest in 10-12 firms. The firm said it plans to invest an average cheque of $3 million. It has so far invested in DataProphet, a South African AI-as-a-service business, and Kasha, a Rwandan health access platform.
Fund size: $50 million
Target: To invest in B2B companies mostly edtech, health tech, fintech, AI and agritech ventures, and bridge Series B funding gap in South Africa.

South African VC Knife Capital closes $50M Series B fund for startups with high exit potential

Gaia Energy Impact Fund II
The fund, which is a brainchild of Gaia Impact, Capital Croissance, Schneider Electric, Capelan, and Investisseurs & Partenaires (I&P) is investing in “sectors encompassing decarbonized energy access, productive energy utilization, electric mobility, new energy solutions, and enabling technologies.”
Fund size: €80 ($86) million
Target: GEIF II will invest in seed, Series A and Series B startups and SMEs in the renewable energy value chain, with 85% of them from sub-Saharan Africa.

Energy Entrepreneurs Growth Fund
EEGF is an initiative by Shell Foundation and FMO, launched in 2019, and provides mezzanine, equity and debt investments. The fund is jointly managed by Dutch impact investment manager Triple Jump, and off-grid sector venture builder Persistent. The fund reached a final close last year.
Fund size: $125 million
Target: Early and growth-stage companies in the energy sector in Africa.

Seedstars Youth Wellbeing Ventures
Seedstars Capital and Swiss philanthropic foundation Fondation Botnar launched Seedstars Youth Wellbeing Ventures fund last year. The evergreen investment vehicle will back startups including those that advance health services, environmental sustainability and ecological resilience (like access to clean energy), local food security, water and sanitation, waste management, affordable housing, access to employment and safe and sustainable transportation in Tanzania, Ghana, Senegal, Morocco and Egypt.
Fund size: $20 million
Target: Pre-seed to Series A startups

Seedstars, Fondation Botnar partner to back African startups focused on youth wellbeing

Pepea fund
Impact investor Goodwell Investments and Oxfam Novib, a Dutch foundation and Oxfam International affiliate, set up Pepea, the fund, to provide financing to early-stage startups in Kenya, Uganda and Ethiopia. The fund, created with the backing of Oxfam Novib Impact Investments, will provide mezzanine finance, which is a debt that can be turned into equity.
Fund size: €20 million
Target: Early-stage businesses that have been in existence for one to five years. It will invest in businesses in sustainable agriculture, energy, clean mobility, logistics and waste management sectors, which produce basic goods and services that represent a huge proportion of household spending for lower-income communities.

Oxfam Novib and Goodwell target East African startups with €20M Pepea fund

Private Equity Funds

Alterra Capital Partners
Alterra Capital, an Africa-focused private equity firm backed by Africa’s richest man Aliko Dangote, secured $140 million. Its investees include Nigeria online travel company Wakanow, regional banking institution Access Bank and logistics company J&J Africa.

Fund size: $500 million.
Target: It invests in a number of sectors, including consumer goods, telecommunications, technology, logistics healthcare.

Convergence Partners Digital Infrastructure Fund
The fund, launched by PE firm Convergence Partners, hit a final close last year, and plans to play a pivotal role in ensuring sustained growth of digital technologies across sub-Saharan Africa.
Fund size: $296 million
Target: The fund will mainly invest in “digital infrastructure opportunities” and this includes investments in fiber networks, data centers, wireless, towers, cloud, Internet of Things (IoT), artificial intelligence (AI) and others that are essential in the growth of the African digital economy. Additionally, besides investing in physical assets, it is keen to support tech-enabled businesses that support access to education, financial services, healthcare and other essential services.

LeapFrog’s new fund to double down on financial and healthcare sectors in Africa and Asia

uMunthu II fund

uMunthu II fund, by Goodwell Investments and Alitheia Capital, both impact private equity firms with extensive experience in Africa, reached a first close of €57 million ($61 million) last year.
Fund size: $150 million (minimum target)
Target: Local entrepreneurs and providing local solutions to local issues, particularly those “ensuring high-quality, reasonably priced goods and services for underserved low-income groups.”

Sanari 3S Growth Fund
Sanari 3S Growth Fund is by prominent South African private equity firm Sanari Capital, that had a second close of $65 million last year.
Fund size: $100 million
Target: It invests in “founder-run, owner-managed and family-owned businesses across the mid-market segment.”

Do you have an update about new funds or funds listed above? Reach out to the writer via [email protected].

Partech Africa

Partech closes its second Africa fund at $300M+ to invest from seed to Series C

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Partech Africa

Image Credits: Partech Africa

Partech has closed its second Africa fund, Partech Africa II, at €280 million ($300 million+), just one year after reaching its first close.

At that size, Partech Africa, which originally targeted €230 million before its fundraising efforts started, solidifies its position as the largest fund dedicated to African startups.

Amid a backdrop of global VCs and institutional investors pulling back from Africa, Partech Africa’s recent fund closure is significant. The continent witnessed a notable decline in investor activity, with a 50% decrease in 2023 compared to the previous year, as highlighted in a Partech report. This retreat, influenced by global economic shifts and local challenges, translated into reduced venture capital inflows for African startups, totaling between $2.9 billion and $4.1 billion last year, down from $4.6 billion to $6.5 billion in 2022.

How African startups raised funding in 2023

The impact was felt across all investment stages, with seed-stage deals decreasing by 33% and growth-stage deals by 39%, according to Partech’s findings. While Partech Africa, known to lead rounds, cannot single-handedly reverse this trend, its focus on seed to Series C rounds may offer some stability and support for startups navigating these challenging times.

Partech Africa wants to support founders at various stages of their journey, from early to later rounds leveraging its position in the ecosystem, the firm’s general partners communicated. “The capacity to anchor rounds at all stages from seed to early growth, is more critical than ever,” Cyril Collon said in a statement.

Meanwhile, in an email to TechCrunch, Tidjane Deme says the VC firm’s expanding team will enable it to effectively deploy capital and offer assistance to portfolio companies across these stages. With offices in Dakar, Nairobi, and Dubai, Partech Africa has recently established a presence in Lagos, where it’s actively hiring to engage closely with startups in the region, underscoring the city’s significance as a third of the firm’s portfolio companies are based there. However, he clarified that the firm will deploy the majority of its second fund between Series A and B rounds.

Among the investments from its second fund is Revio, a South African payment orchestration platform, where Partech Africa co-led the seed round with global fintech fund QED. Additionally, the firm has made undisclosed investments in an Egyptian proptech and a Senegalese e-commerce startup. Partech Africa intends to back over 20 companies, with initial investments ranging from $1 million to $15 million, it disclosed.

The Dakar-based venture capital firm, which has backed 17 startups in its first fund, prioritizes sectors such as fintech, agtech, health tech, retail, FMCG, and agency banking, which are crucial for Africa’s employment and economic activity. Notable investments include Wave, TradeDepot, Yoco, and Reliance.

“Companies from the first fund can benefit from follow-on capital from the first fund but not from the second one,” Deme commented on the firm’s deployment strategy. “We keep supporting Fund 1 companies through their journey with capital and in many other ways.”

More of the fund’s strategy was covered during its first close last February.

Partech hits first close of largest Africa-focused fund, at €245M

Partech Africa’s investor base reflects a diverse range of profiles. During its first close, development finance institutions, commercial investors, African fund-of-funds, and family offices were some of its limited partners. For its second close, it attracted participation from U.S. and Middle Eastern pension funds, sovereign funds, the Dubai Future District Fund (DFDF), and the African Reinsurance Corporation (Africa Re).

“We are grateful for the support and commitment of our investors: Almost all Fund I investors reinvested, and some more than doubled their commitment,” remarked Collon. “We are also honored to get the support from a new set of strategic investors from the U.S., the Middle East and Africa, and for some of whom, this marks their first commitment in African tech.”

Partech’s African fund is among several notable funds that have emerged on the continent in the past year, despite challenges for fund managers in raising capital as limited partners scrutinize strategy and track record. Other large-sized funds include Norrsken22, Al Mada, and Novastar’s Africa People + Planet. Additionally, firms like Enza Capital, Equator, Knife Capital, and E3 Low Carbon Economy Fund for Africa (E3LCEF) have also closed sizable funds, reflecting continued investor interest in Africa’s growth potential.

Africa-focused funds find their feet amid a downturn

Partech is doubling the size of its African venture fund to $143 million

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

by with No Comment Tech

Maria Rotilu Founder & General Partner, OpenseedVC

Image Credits: OpenseedVC

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage in finding that fit. Data shows that a lack of expertise and business acumen in founders contributes to failed VC investments.

The same principle applies somewhat to operator VCs (firms typically launched by former startup founders). While there’s no definitive proof that operator VCs make better investors, recent research does indicate that founders and operators who become VCs are significantly more successful at backing companies than traditional investor VCs.

Operator VCs have a long history in Silicon Valley. Still, their adoption is less widespread in Europe and Africa: Only 8% of VC firms in Europe and Africa are led by former operators, compared to nearly half in the U.S. OpenseedVC is applying the model in Africa and Europe with a new fund.

The firm, which plans to be the first check in startups launched by operators across both regions, has reached the first close of its $10 million angel-style early-stage fund. General partner Maria Rotilu said “the first close is well into the millions and fundraising is still in progress,” without specifying how much. OpenseedVC hopes to reach the final close within a year, she added.

Supporting operators with funding… and operators

Rotilu founded OpenseedVC with a clear vision: to invest early in experienced operators eager to launch their technology companies. In a statement, OpenseedVC said it would provide these founders with not only capital and conviction at the earliest stages but also the support of a community of seasoned operators, which currently comprises more than 50 individuals.

“If you’re supporting operators that have identified a problem and are making the leap into building their technology, you’ve likely recognized a common challenge: the need for capital and guidance from other experienced individuals. To address this, we focus on enhancing the operator network in four key areas,” said Rotilu in a conversation with TechCrunch.

“In the early stages, expertise in software engineering is crucial. You’d need someone who’s recruited technical talent, built teams and understands infrastructure design, offering invaluable firsthand experience. So if that’s the common thread, I would say firsthand experience is what we optimize for across software engineering, product, go-to-market and people and talent.”

Most of the individuals in OpenseedVC’s operator network are people Rotilu has either worked with or received referrals for. Some are also limited partners in the fund, though they don’t earn carry now. Rotilu also mentioned that other LPs include founders and professionals from traditional and tech businesses and high-net-worth individuals across Africa, Europe and the U.S.

Backing pre-seed startups in Africa and Europe

London-based OpenseedVC is targeting at least 60 startups over the next five years. The early-stage fund, which says it operates with an open application process and allows founders to apply without needing an introduction, will provide checks of up to $150,000 to startups focusing on the future of commerce (including B2B software, AI and fintech), future of work (productivity) and digital health.

“We look at the earliest stages; that’s our sweet spot. Openseed is keen on making pre-seed investments, but the early stage of pre-seed because the later stage of pre-seed is more where you find the traditional VCs. We tend to move independently and quickly — and don’t necessarily need a founder to get a lead investor or anything like that before we invest,” remarked Rotilu. She added that the fund is interested in specific founder profiles within its broader operator-focused lens: domain experts (operators at high-growth tech companies, including first-time founders) and second-time founders who have built and exited a startup.

So far, the early-stage fund has made two investments: one in a stealth U.K.-based AI-enabled supplier dispute resolution software and another in Intron, a speech-to-text transcription model for underserved accents, starting with Africa. 

“We chose Africa and Europe to apply our thesis to work in these regions. Our thesis is that by backing experienced operators early in their journey with the right capital and support from peer operators, you can build a diversified portfolio that generates incredible returns for investors and provides crucial support for ambitious operators when they need it most,” said Rotilu, who prior to OpenseedVC invested across multiple regions with different funds.

Before launching her fund, Rotilu was an operator in various roles, including country manager at Uber and general manager at Branch in Nigeria, where she helped both tech companies scale to millions of users. She later pursued an MBA at Oxford, where she served as managing director at the Oxford Seed Fund, one of the largest student-led funds in Europe. 

Striving for a diversified portfolio

During her MBA, the operator-turned-investor with a background in computer science interned at Hustle Fund, an early-stage fund in the U.S., where she gained experience investing in startups across the U.S., Latin America, Southeast Asia and sub-Saharan Africa. She then joined Octopus Ventures, one of Europe’s largest funds, as a principal and fund manager of First Cheque Fund, the firm’s £10 million early-stage fund for European startups in B2B software, fintech and health sectors.

Rotilu said that at Octopus, she realized a need to focus more on Africa, a market where she had made several angel investments during her professional career. The London-based VC firm provided little avenue for that, and Rotilu, who also wanted clarity and autonomy to develop a strategy she thought suited her experience as an operator and investor across Africa and Europe, saw that as an opportunity to launch her VC firm. 

The increasing number of female-led VC firms globally is a positive trend (even though it’s still difficult for women, particularly those of color, to seek funding or raise a fund). As more women participate in venture investing and more LPs and firms support them, this trend will increase funding for female-led startups, setting the stage for every stakeholder’s success. Most female-led funds are conscious of this significance, so it’s no surprise that OpenseedVC will also actively look to support startups led by female operators.

“There are very few female-led funds globally, and we have a specific perspective on what a diversified portfolio should look like. We focus on diversification across geography, industry and gender,” Rotilu remarked. “A lot of work is being done around diversity, and as a fund, we apply a gender lens to our portfolio strategy. We aim for a truly diverse portfolio, striving for a 50/50 balance in co-founding teams,” she said.