Coder nabs new funds to move dev environments to the cloud

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Digital representation of machine with code and a futuristic keyboard in front of it.

Image Credits: Olemedia / Getty Images

Devs often rely on local environments — i.e. their laptops — to write, build and test code before shipping it to a cloud service to integrate and deploy it. There’s nothing wrong with that approach. But local development can introduce challenges, like conflicts between dev environments and, in the worst case, security exploits.

The usability issues with local dev environments are one reason that cloud development environments (CDEs), which provide a range of remotely hosted software development tooling, have gained clout in recent years. Gartner predicts that by 2026, 60% of cloud workloads will be built and deployed using CDEs.

One vendor relatively early to the CDE market was Coder, which provides preconfigured, geared-toward-the-enterprise cloud environments for developer use cases. Ahead of a large expansion to its platform, Coder announced that it has closed a $35 million funding round — an extension to its Series B — led by Georgian with participation from Uncork Capital, Notable Capital and Redpoint Ventures.

Coder’s co-founders, Ammar Bandukwala, Kyle Carberry and John Andrew Entwistle, met online while in high school, brought together by a shared interest in creating Minecraft plug-ins and servers. To make their video game modding easier, the friends created an open source tool to develop software remotely via a browser, tapping Microsoft’s Visual Studio Code IDE.

Bandukwala, Carberry and Entwistle launched Coder shortly after (in 2017), and the tool became the startup’s first product.

“For Coder, the broader slowdown in tech has been an accelerant,” said Rob Whiteley, Coder’s CEO, who joined the company following Entwistle’s departure in 2021. (Bandukwala and Carberry still serve as co-CTOs.) “Companies have been forced to look inward with a ‘do more with less’ mantra, seeking to understand how to retain their best talent and operate more efficiently without sacrificing velocity and security.”

Coder
Image Credits: Coder

Coder offers free, open source software for platform and dev teams to migrate dev environments and source code from local machines to cloud infrastructure. The software is self-hosted and self-managed, and it works across multiple clouds, delivering capabilities such as role-based access controls and end-to-end encryption.

Coder makes money by charging for Coder Enterprise, a self-hosted version of its open source software with additional governance and user management features.

“Platform teams have complete control over where Coder is hosted and the services that Coder uses,” Whiteley said. “By centralizing previously decentralized development environments, enterprises maintain better control and governance over their source code and IP.”

The sales pitch appears to be resonating.

Coder’s open source software has around 1.2 million monthly active users, and Dropbox, Discord and Skydio are among the company’s paying customers (as well as four unnamed U.S. intelligence agencies). Revenue doubled last year, meanwhile, and Whiteley expects that it’ll double again in 2024, as Coder expands its client footprint in Europe, the Middle East and Africa.

“By 2025, 30% of large enterprises will use cloud development environments to streamline development workflows and enable better manageability, and by 2027, 40% of organizations in highly regulated verticals will mandate cloud development environments,” Whiteley added, citing Gartner data.

With nearly $80 million in the bank and a workforce of just over 50 people, the Austin, Texas-based company plans to grow globally, invest in its open source tooling with a dedicated developer relations team and expand its sales, marketing, support and engineering orgs, Whiteley said.

Big Data futuristic background

Axelera lands new funds as the AI chip market heats up

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Big Data futuristic background

Image Credits: Getty Images

The generative AI boom is driving the demand for AI chips, which are purpose-built to train and run generative AI models. And major players, from VCs to startups, are scrambling to get in on the ground floor.

SoftBank’s Masayoshi Son is reportedly looking to raise $100 billion for a chip initiative that would compete with tech giant Nvidia. OpenAI, meanwhile, is said to be in talks with investment firms to launch an AI chip-making venture.

AI chip startup Axelera has kept a comparatively low profile. Nevertheless, it has managed to win over backers including Samsung in part by focusing on a niche within the burgeoning AI chip market: chips that run AI on edge devices.

“There’s no denying that the AI industry has the potential to transform a multitude of sectors,” Fabrizio Del Maffeo, one of the co-founders of Axelera and its CEO, told TechCrunch in an interview. “However, to truly harness the value of AI, organizations need a solution that delivers high-performance and efficiency while balancing cost.”

Axelera — headquartered in the Netherlands, with a roughly 180-person workforce spread across offices in Belgium, Switzerland, Italy and the U.K. — designs AI-running chips and systems for applications like security, retail, automotive and robotics that it supplies to partners manufacturing B2B edge computing and internet of things products.

Axelera was born out of an effort led by Del Maffeo and a group at Imec, the Belgium-based technology lab, along with Evangelos Eleftheriou and a group of Zurich-based IBM researchers to build a highly efficient AI chip architecture. The founding team incubated much of Axelera within Bitfury Group, a blockchain company specializing in Bitcoin hardware.

The defining characteristics of Axelera’s AI hardware stack are the instruction set architecture (ISA) RISC-V and in-memory computing.

ISAs are a technical spec at the foundation of chips that describe how software controls the chip’s hardware. Chip designers typically license an existing ISA from a large chipmaker such as Arm or Intel, but RISC-V presents an open, no-royalties-attached alternative. As for in-memory computing, it refers to running calculations in a system’s RAM to reduce the latency introduced by storage devices.

Axelera isn’t the first to try its hand at an in-memory and/or RISC-V-based architecture for AI chips.

NeuroBlade is developing chips that combine both compute and memory into a single hardware block for data processing. MemVerge, GigaSpaces, Hazelcast and H20.ai also offer in-memory hardware solutions for AI and data analytics applications. Elsewhere, Tenstorrent, backed by Hyundai Motor Group and Samsung, sells AI processors and other related IP built around RISC-V.

Axelera
One of Axelera’s accelerator cards.
Image Credits: Axelera

Axelera has attempted to differentiate itself by delivering both chip hardware and software to manage and deploy AI models to that hardware. And from all appearances, the strategy appears to be working for it.

Axelera on Thursday announced that it closed a $68 million Series B funding round that brings its total raised to $120 million. Contributors to the round include the European Innovation Council Fund, Innovation Industries Strategic Partnership Fund, Invest-NL and Samsung Catalyst Fund.

The new cash will be put toward expanding to new markets ahead of full production of Axelera’s flagship Metis AI platform in H2 2024, according to Del Maffeo. Axelera also has an eye on the data center chip market, with preliminary plans to fund R&D of chips aimed at high-performance compute use cases.

“Metis entered in full production in Q2 and will be delivered in volume in Q3,” Del Maffeo said. “Axelera AI is now developing a new generation of products for computer vision, large language models and large multimodal models. This new product family will be unveiled later this year and enter in full production in 2025.”

The challenge will be shipping its AI chips at scale — and competing against countless others in the AI chip race. Many rivals have formidable backing; a Crunchbase report from June finds that VC-backed chip startups have raised nearly $5.3 billion in just 175 deals so far this year.

The reward could be substantial, however. According to Statista and Market.us data, the AI chip market might gross as much as $67 billion in revenue by 2027. Axelera has little chance of unseating entrenched vendors like Nvidia anytime soon, if ever. (Nvidia has an estimated 70% to 95% share of the AI chip market, per Mizuho Securities.) But nabbing even a fraction of the market would be a meaningful win.

“The funding supports our mission to democratize access to AI, from the edge to the cloud,” Del Maffeo said, adding that Axelera has “tens” of enterprise customers. “By expanding our product lines beyond the edge computing market, we are able to address industry challenges in AI inference and support current and future AI processing needs.”

Seed VCs are turning to new ‘pro rata’ funds that help them compete with the big firms

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Image Credits: Say-Cheese / Getty Images

Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets that gives them the right to buy more shares in a portfolio company during consequent funding rounds to maintain an ownership percentage and avoid dilution.

Still, while these rights are not exactly “earned,” they can be expensive. One of the latest trends in VC investing these days are funds dedicated to helping seed VCs exercise their pro rata rights. 

The problem is that in later rounds, the new lead investor will usually get its preferred allocation. Meanwhile, other new investors try to get what they can while existing investors have to pony up whatever the lead has agreed to pay per share if they want to exercise their pro rata rights. 

And, often, the new investors would prefer to squeeze pro rata investors out of the round altogether and take more for themselves. Meanwhile, founders want to cap the total chunk of their company they will sell in the round.

“It’s pretty common that a downstream investor will want to take as much of the round as they want, and will sometimes tell the founder they need an allocation that’s so large, it wouldn’t leave room for pro rata rights — essentially telling the founder to ask earlier investors if they would willingly waive their pro rata rights,” Edwards told TechCrunch. 

Earlier investors often have to rely on the founder “going to bat for us and pushing back on that request,” which will only happen if the investors provide enough value that they feel comfortable negotiating on the earlier investors’ behalf, he said.

Pro-rata is easier to get than ever today, but investors are thinking twice

Securing capital to stay in the game

Sometimes venture capitalists don’t choose to exercise their pro rata rights. While they obviously might pass on buying more shares in a struggling startup, they are often forced to pass up buying more of their winners, too, because they can’t afford them. 

Between 2020 and 2022 — during the VC investing frenzy years, for example — Edwards saw a lot of early-stage funds decline to exercise pro rata on later-stage rounds due to what he called “eye-popping valuations.”

Jesse Bloom, SaaS Ventures
Jesse Bloom, partner at SaaS Ventures.
Image Credits: SaaS Ventures /

Indeed, new investors in later rounds often run bigger funds than seed investors and can pay more per share, making it tough for early-stage investors and smaller funds to keep participating in later rounds.

This is where investment companies like Alpha Partners, SignalRank and now SaaS Ventures come in. All three deploy capital at the Series B level and later rounds to support seed-stage and Series A VCs who want to exercise their pro rata rights.

“When, for example, Sequoia invests in a Series A, other existing investors can participate,” SaaS Ventures partner Jesse Bloom told TechCrunch. “However, if you want to get in on the Series B, you have to be invited by Sequoia, the founder or were involved in the Series A. My job is to hear from my network that it is happening and find Series A investors and offer to stake them in their pro rata. I give them money to invest in their pro rata, and I get 10% of the carried interest.”

Most, if not all, of the names on the list of top-tier VC firms Bloom monitors for later-stage deals are those you recognize, from Andreessen Horowitz to Insight Partners to Valor Equity Partners.

He is also able to make quick decisions because, if a top-tier VC fund is leading a deal, he said he doesn’t have to do as much diligence, saying, “That’s the only way I can get in — I’m betting on the unfair advantage of the top guys.”

That’s another reason why he only invests in deals led by a list of the top 25 VC funds listed on its website, Bloom said. “We believe access beats diligence in the long run in later-stage venture capital and will do whatever it takes to gain access to deals led by our top funds, even if it means we don’t know as much about the company,” he said.

Bloom previously worked at Alpha Partners before SaaS Ventures leaders Collin Gutman, Brian Gaister and Seth Shuldiner hired him to raise a fund for them.

He has now closed a new fund for SaaS Ventures with $24 million in capital commitments to invest in those pro rata opportunities. The new fund limited partnership is anchored by Pennington Partners, which manages multiple family offices. It is also backed by registered investment advisors who understand the advantages had by the large venture capital firms but are often unable to get in at the higher ticket sizes, Bloom said.

Bloom has made five deals already, including Apollo.io’s Series D and MaintainX’s Series C, both led by Bain Capital Ventures; Cover Genius’s Series E led by Spark Capital; and Elisity’s Series B round led by Insight Partners. 

Apollo.io, a full-stack sales tech platform, bags $100M at a $1.6B valuation

Pro rata boom

Bloom’s not alone in finding success for pro rata-targeted funds. Keith Teare’s SignalRank raises funds on a quarterly basis, including a $33 million one from January, according to an SEC filing. Alpha is also raising a new fund to target pro rata, according to Steve Brotman, managing partner at Alpha Partners. The firm secured just over $125 million in capital commitments, and he expects to close at the end of July with over $150 million.

For many of the early investors on a company’s cap table, which are smaller than more established growth funds, pro rata is traditionally one of the only ways to gain access to these highest quality later-stage rounds, Bloom said. Similarly for founders, this type of deal supports their existing investors.

“We are essentially LPs supporting the pro-rata rights of existing investors,” he said. “If a company is destined to IPO, at some point down the line, pro-rata will become too large for existing investors to fill and they get left behind, so I give them fast and easy capital to continue investing in their winners.”

As Root VC’s Edwards mentioned, two years ago, investors weren’t rushing to make pro rata deals. Today, that seems to be a different story. The pro rata game is heating up, according to Bloom and Brotman, who say much of this is coming from fewer deals being done at later stages, so there is more of a challenge getting access to those big-ticket deals. 

In the first quarter of 2024, $9.3 billion in capital was raised by VCs across 100 U.S. funds, which is just 11.3% of the $81.8 billion raised in the 2023 market, according to PitchBook-NVCA Venture Monitor. 

Steve Brotman, Alpha Partners
Steve Brotman, managing partner at Alpha Partners
Image Credits: Alpha Partners /

Investors said this leaves an abnormally high number of VCs unable to fund their pro rata rights. In fact, Brotman says as much as 95% of the time, investors aren’t doing their pro rata. 

“Pro rata rights and opportunity funds really boomed out in 2021 and 2022, then in 2023, there started to be a downward trend,” he told TechCrunch. “In 2024, very few funds are being raised by small funds. LPs are figuring this out. They did a lot of co-investing in 2022, and 2021 and got their asses burned, honestly, because they rushed in at massive valuations.”

He likened it to playing the card game Blackjack and if you have a certain hand, you can double down on your bet, depending on what the dealer is showing. “If you don’t double down when you can, the house wins. The same is true in venture capital, but no one’s bothered to talk about it,” he told TechCrunch. 

Well-known angel investor Jason Calacanis, founder and CEO of Inside.com and Launch, sat down with Brotman in May for his podcast, “Driving Alpha,” and told Brotman how if he had utilized his pro rata follow-on rights in his first fund, he could have tripled the returns, which already achieved a 5x return. So why didn’t he?

“Well, back in that day, you were trying to use your 100 swings at bat, or in the case of this $10 million, 109 swings, to hit one outlier based on the Power Law,” Calacanis said. In this case, the “Power Law” is where one single investment yields returns larger than all other investments combined.

Among institutions and family offices, risk and duration are affected right now, with duration “really being the killer,” Brotman said. Many of these institutions don’t have 10 to 15 years to prove their worth — more like three to six years, he said.

Venture capitalists need to double down on their winners and speak with their founders about why it’s important they do so. Also, if they can do their pro rata rights, they can often stick around on the board, which is important for early VCs, Brotman said.

“A big component of being a venture capitalist is being able to ride your unicorns,” he said. “Even if they’re not on the board, the fact that they’re investing, the CEO still will spend more time with them and answer their calls.”

Cover Genius lands $70M infusion to grow its embedded insurance business

Hey, there ARE growth funds in Europe — Kennet raises $287M for its largest fund to date

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Kennet has raised €266 million for its largest growth fund to date

Image Credits: Kennet

Europe is routinely castigated by tech industry observers for having too few “growth capital” funds, and, compared to the U.S., that’s true. That said, it is nowhere near nonexistent on this front. To wit: Growth equity investor Kennet of London just announced it has raised €266 million for its largest fund to date, Kennet VI, which is already being deployed into B2B SaaS companies across Europe.

Kennet focuses exclusively on backing established B2B SaaS startups that are founder-owned and either highly capital efficient or fully bootstrapped, meaning they’re built without external capital. A good example of this is the conference networking app Grip, which raised $13 million in 2021, with Kennet leading the round. 

The Kennet VI fund follows the previous five funds Kennet has run over the last 25 years. Its most recent exit was with Eloomi in January 2024. The learning experience platform was acquired by floated software company Ceridian. Kennet said this generated a 3.1x cash multiple.

Earlier (numerous) exits include Nuxeo (a 5x exit), Dext (3.8x), CrossBorder Solutions (6.4x), Rimilia (2.5x), and Impartner (2.6x).

Investment from Kennet is typically the first external funding that companies receive and is used to scale and expand internationally, build world-class management teams, and amass strategic value.

In an interview with TechCrunch, Hillel Zidel, managing director, Kennet Partners, said: “This new fund is very consistent with what we’ve done in the prior funds, which is B2B software focused on bootstrapped and capital efficient companies at the growth stage.

“We’re probably the only group with an exclusive focus on this category. And with each client, we just want to do more and more in terms of, you know, being of service to bootstrap founders. The exits we’ve had demonstrate that if you invest in good businesses that have strategic value, you’re not dependent on a particular market cycle to be able to exit successfully.”

The Kennet VI fund was raised in partnership with cornerstone investor Edmond de Rothschild Private Equity, which started investing in the fund in 2017. Bpifrance, British Patient Capital and Federated Hermes Private Equity also committed to the fund.

There’s been a rise in growth funds in Europe. Earlier this year Index Ventures announced $2.3 billion in new funds, spread across different stages, with $800 million dedicated to venture investment and $1.5 billion set aside for growth- and late-stage companies.

Aside from normal venture capital, the often quieter “growth capital” sector can frequently see great returns for entrepreneurs who prefer to retain a lot of ownership and control but are also willing to bootstrap over a longer period in order to reach revenues and profits. 

X shareholders as of June 2023 included funds tied to Bill Ackman, Binance, and Sean 'Diddy' Combs

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CANNES, FRANCE - JUNE 19: Elon Musk attends 'Exploring the New Frontiers of Innovation: Mark Read in Conversation with Elon Musk' session during the Cannes Lions International Festival Of Creativity 2024 - Day Three on June 19, 2024 in Cannes, France. (Photo by Marc Piasecki/Getty Images)

Image Credits: Marc Piasecki / Getty Images

A court order recently forced Elon Musk’s X to reveal its full list of shareholders, as of June 2023, to the public.

Many of the recognizable tech industry names had already been reported as backers of Musk’s effort to buy the social media company then known as Twitter and take it private, including VC firms Andreessen Horowitz, Draper Fisher Jurvetson, and Sequoia Capital, as well as Oracle founder Larry Ellison and crypto company Binance.

Less widely known was the involvement of Sean “Diddy” Combs, who is apparently an investor through Sean Combs Capital (his investment was previously reported by the Daily Mail). Bill Ackman, the activist investor who recently made headlines with his campaign against activism at Ivy League schools, is also a shareholder through the Pershing Square Foundation. So is 8VC, the VC firm co-founded by Palantir’s Joe Lonsdale, which has reported ties to Russian oligarchs.

Some of the listed shareholders were investors in Twitter before Musk’s takeover. For example, Twitter co-founder Jack Dorsey and Saudi prince Alwaleed bin Talal al Saud reportedly rolled over their Twitter shares into stakes in what’s now X.

The court filing containing the list of shareholders is dated June 9, 2023, but it was unsealed this week in response to a motion from the Reporters Committee for Freedom of the Press on behalf of independent journalist Jacob Silverman.

In a blog post publishing the full list of investors, Silverman acknowledged that many of Musk’s backers were already known and that the list doesn’t include ownership amounts. Still, he said, it’s “a great starting point for journalists, researchers, regulators, activists, and anyone else who wants to know what’s going on behind the scenes of this important company.”

Read the full list here.

Hey, there ARE Growth funds in Europe — Kennet raises $287M for its largest fund to date

by with No Comment Tech

Kennet has raised €266 million for its largest growth fund to date

Image Credits: Kennet has raised €266 million for its largest growth fund to date

Europe is routinely castigated by tech industry observers for having too little ‘growth capital’ funds, and, compared to the US, that’s true. That said, it is nowhere near non-existent on this front. To wit: Growth equity investor Kennet has just announced it’s raised €266 million for its largest fund to date, Kennet VI, which is already being deployed into B2B SaaS companies across Europe.

Kennet focuses exclusively on backing established B2B SaaS startups that are founder-owned and either highly capital efficient or fully ‘bootstrapped’ – meaning they’re built without external capital. A good example of this is the conference networking app Grip which raised $13M in 2021, with Kennet leading the round. 

The Kennet VI fund follows the previous five funds Kennet has run over the last 25 years. Its most recent exit was with Eloomi in January 2024. The learning experience platform was acquired by floated software company Ceridian. Kennet said this generated a 3.1x cash multiple.

Earlier (numerous) exits include Nuxeo (a 5x exit), Dext (3.8x), CrossBorder Solutions (6.4x), Rimilia (2.5x), and Impartner (2.6x).

Investment from Kennet is typically the first external funding that companies receive and is used to scale and expand internationally, build world-class management teams, and amass strategic value.

In an interview with TechCrunch, Hillel Zidel, managing director, Kennet Partners, said: “This new fund is very consistent with what we’ve done in the prior funds, which is B2B software focused on bootstrapped and capital efficient companies at the growth stage.

“We’re probably the only group with an exclusive focus on this category. And with each client, we just want to do more and more in terms of, you know, being of service to bootstrap founders. The exits we’ve had demonstrate that if you invest in good businesses that have strategic value, you’re not dependent on a particular market cycle to be able to exit successfully.”

The Kennet VI fund was raised in partnership with cornerstone investor Edmond de Rothschild Private Equity, which started investing in the fund in 2017. Bpifrance, British Patient Capital and Federated Hermes Private Equity also committed to the fund.

There’s been a rise in growth funds in Europe. Earlier this year Index Ventures announced $2.3 billion in new funds, spread across different stages, with $800M dedicated to venture investment and $1.5BN set aside for growth- and late-stage companies.

Aside from normal venture capital, the often quieter ‘growth capital’ sector can frequently see great returns for entrepreneurs who prefer to retain a lot of ownership and control but are also willing to bootstrap over a longer period in order to reach revenues and profits. 

Axelera lands new funds as the AI chip market heats up

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Big Data futuristic background

Image Credits: Getty Images

The generative AI boom is driving the demand for AI chips, which are purpose-built to train and run generative AI models. And major players, from VCs to startups, are scrambling to get in on the ground floor.

SoftBank’s Masayoshi Son is reportedly looking to raise $100 billion for a chip initiative that would compete with tech giant Nvidia. OpenAI, meanwhile, is said to be in talks with investment firms to launch an AI chip-making venture.

AI chip startup Axelera has kept a comparatively low profile. Nevertheless, it has managed to win over backers including Samsung in part by focusing on a niche within the burgeoning AI chip market: chips that run AI on edge devices.

“There’s no denying that the AI industry has the potential to transform a multitude of sectors,” Fabrizio Del Maffeo, one of the co-founders of Axelera and its CEO, told TechCrunch in an interview. “However, to truly harness the value of AI, organizations need a solution that delivers high-performance and efficiency while balancing cost.”

Axelera — headquartered in the Netherlands, with a roughly 180-person workforce spread across offices in Belgium, Switzerland, Italy and the U.K. — designs AI-running chips and systems for applications like security, retail, automotive and robotics that it supplies to partners manufacturing B2B edge computing and internet of things products.

Axelera was born out of an effort led by Del Maffeo and a group at Imec, the Belgium-based technology lab, along with Evangelos Eleftheriou and a group of Zurich-based IBM researchers to build a highly efficient AI chip architecture. The founding team incubated much of Axelera within Bitfury Group, a blockchain company specializing in Bitcoin hardware.

The defining characteristics of Axelera’s AI hardware stack are the instruction set architecture (ISA) RISC-V and in-memory computing.

ISAs are a technical spec at the foundation of chips that describe how software controls the chip’s hardware. Chip designers typically license an existing ISA from a large chipmaker such as Arm or Intel, but RISC-V presents an open, no-royalties-attached alternative. As for in-memory computing, it refers to running calculations in a system’s RAM to reduce the latency introduced by storage devices.

Axelera isn’t the first to try its hand at an in-memory and/or RISC-V-based architecture for AI chips.

NeuroBlade is developing chips that combine both compute and memory into a single hardware block for data processing. MemVerge, GigaSpaces, Hazelcast and H20.ai also offer in-memory hardware solutions for AI and data analytics applications. Elsewhere, Tenstorrent, backed by Hyundai Motor Group and Samsung, sells AI processors and other related IP built around RISC-V.

Axelera
One of Axelera’s accelerator cards.
Image Credits: Axelera

Axelera has attempted to differentiate itself by delivering both chip hardware and software to manage and deploy AI models to that hardware. And from all appearances, the strategy appears to be working for it.

Axelera on Thursday announced that it closed a $68 million Series B funding round that brings its total raised to $120 million. Contributors to the round include the European Innovation Council Fund, Innovation Industries Strategic Partnership Fund, Invest-NL and Samsung Catalyst Fund.

The new cash will be put toward expanding to new markets ahead of full production of Axelera’s flagship Metis AI platform in H2 2024, according to Del Maffeo. Axelera also has an eye on the data center chip market, with preliminary plans to fund R&D of chips aimed at high-performance compute use cases.

“Metis entered in full production in Q2 and will be delivered in volume in Q3,” Del Maffeo said. “Axelera AI is now developing a new generation of products for computer vision, large language models and large multimodal models. This new product family will be unveiled later this year and enter in full production in 2025.”

The challenge will be shipping its AI chips at scale — and competing against countless others in the AI chip race. Many rivals have formidable backing; a Crunchbase report from June finds that VC-backed chip startups have raised nearly $5.3 billion in just 175 deals so far this year.

The reward could be substantial, however. According to Statista and Market.us data, the AI chip market might gross as much as $67 billion in revenue by 2027. Axelera has little chance of unseating entrenched vendors like Nvidia anytime soon, if ever. (Nvidia has an estimated 70% to 95% share of the AI chip market, per Mizuho Securities.) But nabbing even a fraction of the market would be a meaningful win.

“The funding supports our mission to democratize access to AI, from the edge to the cloud,” Del Maffeo said, adding that Axelera has “tens” of enterprise customers. “By expanding our product lines beyond the edge computing market, we are able to address industry challenges in AI inference and support current and future AI processing needs.”

Seed VCs are turning to new ‘pro rata’ funds that help them compete with the big firms

by with No Comment Tech

Image Credits: Say-Cheese / Getty Images

Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets that gives them the right to buy more shares in a portfolio company during consequent funding rounds to maintain an ownership percentage and avoid dilution.

Still, while these rights are not exactly “earned,” they can be expensive. One of the latest trends in VC investing these days are funds dedicated to helping seed VCs exercise their pro rata rights. 

The problem is that in later rounds, the new lead investor will usually get its preferred allocation. Meanwhile, other new investors try to get what they can while existing investors have to pony up whatever the lead has agreed to pay per share if they want to exercise their pro rata rights. 

And, often, the new investors would prefer to squeeze pro rata investors out of the round altogether and take more for themselves. Meanwhile, founders want to cap the total chunk of their company they will sell in the round.

“It’s pretty common that a downstream investor will want to take as much of the round as they want, and will sometimes tell the founder they need an allocation that’s so large, it wouldn’t leave room for pro rata rights — essentially telling the founder to ask earlier investors if they would willingly waive their pro rata rights,” Edwards told TechCrunch. 

Earlier investors often have to rely on the founder “going to bat for us and pushing back on that request,” which will only happen if the investors provide enough value that they feel comfortable negotiating on the earlier investors’ behalf, he said.

Pro-rata is easier to get than ever today, but investors are thinking twice

Securing capital to stay in the game

Sometimes venture capitalists don’t choose to exercise their pro rata rights. While they obviously might pass on buying more shares in a struggling startup, they are often forced to pass up buying more of their winners, too, because they can’t afford them. 

Between 2020 and 2022 — during the VC investing frenzy years, for example — Edwards saw a lot of early-stage funds decline to exercise pro rata on later-stage rounds due to what he called “eye-popping valuations.”

Jesse Bloom, SaaS Ventures
Jesse Bloom, partner at SaaS Ventures.
Image Credits: SaaS Ventures /

Indeed, new investors in later rounds often run bigger funds than seed investors and can pay more per share, making it tough for early-stage investors and smaller funds to keep participating in later rounds.

This is where investment companies like Alpha Partners, SignalRank and now SaaS Ventures come in. All three deploy capital at the Series B level and later rounds to support seed-stage and Series A VCs who want to exercise their pro rata rights.

“When, for example, Sequoia invests in a Series A, other existing investors can participate,” SaaS Ventures partner Jesse Bloom told TechCrunch. “However, if you want to get in on the Series B, you have to be invited by Sequoia, the founder or were involved in the Series A. My job is to hear from my network that it is happening and find Series A investors and offer to stake them in their pro rata. I give them money to invest in their pro rata, and I get 10% of the carried interest.”

Most, if not all, of the names on the list of top-tier VC firms Bloom monitors for later-stage deals are those you recognize, from Andreessen Horowitz to Insight Partners to Valor Equity Partners.

He is also able to make quick decisions because, if a top-tier VC fund is leading a deal, he said he doesn’t have to do as much diligence, saying, “That’s the only way I can get in — I’m betting on the unfair advantage of the top guys.”

That’s another reason why he only invests in deals led by a list of the top 25 VC funds listed on its website, Bloom said. “We believe access beats diligence in the long run in later-stage venture capital and will do whatever it takes to gain access to deals led by our top funds, even if it means we don’t know as much about the company,” he said.

Bloom previously worked at Alpha Partners before SaaS Ventures leaders Collin Gutman, Brian Gaister and Seth Shuldiner hired him to raise a fund for them.

He has now closed a new fund for SaaS Ventures with $24 million in capital commitments to invest in those pro rata opportunities. The new fund limited partnership is anchored by Pennington Partners, which manages multiple family offices. It is also backed by registered investment advisors who understand the advantages had by the large venture capital firms but are often unable to get in at the higher ticket sizes, Bloom said.

Bloom has made five deals already, including Apollo.io’s Series D and MaintainX’s Series C, both led by Bain Capital Ventures; Cover Genius’s Series E led by Spark Capital; and Elisity’s Series B round led by Insight Partners. 

Apollo.io, a full-stack sales tech platform, bags $100M at a $1.6B valuation

Pro rata boom

Bloom’s not alone in finding success for pro rata-targeted funds. Keith Teare’s SignalRank raises funds on a quarterly basis, including a $33 million one from January, according to an SEC filing. Alpha is also raising a new fund to target pro rata, according to Steve Brotman, managing partner at Alpha Partners. The firm secured just over $125 million in capital commitments, and he expects to close at the end of July with over $150 million.

For many of the early investors on a company’s cap table, which are smaller than more established growth funds, pro rata is traditionally one of the only ways to gain access to these highest quality later-stage rounds, Bloom said. Similarly for founders, this type of deal supports their existing investors.

“We are essentially LPs supporting the pro-rata rights of existing investors,” he said. “If a company is destined to IPO, at some point down the line, pro-rata will become too large for existing investors to fill and they get left behind, so I give them fast and easy capital to continue investing in their winners.”

As Root VC’s Edwards mentioned, two years ago, investors weren’t rushing to make pro rata deals. Today, that seems to be a different story. The pro rata game is heating up, according to Bloom and Brotman, who say much of this is coming from fewer deals being done at later stages, so there is more of a challenge getting access to those big-ticket deals. 

In the first quarter of 2024, $9.3 billion in capital was raised by VCs across 100 U.S. funds, which is just 11.3% of the $81.8 billion raised in the 2023 market, according to PitchBook-NVCA Venture Monitor. 

Steve Brotman, Alpha Partners
Steve Brotman, managing partner at Alpha Partners
Image Credits: Alpha Partners /

Investors said this leaves an abnormally high number of VCs unable to fund their pro rata rights. In fact, Brotman says as much as 95% of the time, investors aren’t doing their pro rata. 

“Pro rata rights and opportunity funds really boomed out in 2021 and 2022, then in 2023, there started to be a downward trend,” he told TechCrunch. “In 2024, very few funds are being raised by small funds. LPs are figuring this out. They did a lot of co-investing in 2022, and 2021 and got their asses burned, honestly, because they rushed in at massive valuations.”

He likened it to playing the card game Blackjack and if you have a certain hand, you can double down on your bet, depending on what the dealer is showing. “If you don’t double down when you can, the house wins. The same is true in venture capital, but no one’s bothered to talk about it,” he told TechCrunch. 

Well-known angel investor Jason Calacanis, founder and CEO of Inside.com and Launch, sat down with Brotman in May for his podcast, “Driving Alpha,” and told Brotman how if he had utilized his pro rata follow-on rights in his first fund, he could have tripled the returns, which already achieved a 5x return. So why didn’t he?

“Well, back in that day, you were trying to use your 100 swings at bat, or in the case of this $10 million, 109 swings, to hit one outlier based on the Power Law,” Calacanis said. In this case, the “Power Law” is where one single investment yields returns larger than all other investments combined.

Among institutions and family offices, risk and duration are affected right now, with duration “really being the killer,” Brotman said. Many of these institutions don’t have 10 to 15 years to prove their worth — more like three to six years, he said.

Venture capitalists need to double down on their winners and speak with their founders about why it’s important they do so. Also, if they can do their pro rata rights, they can often stick around on the board, which is important for early VCs, Brotman said.

“A big component of being a venture capitalist is being able to ride your unicorns,” he said. “Even if they’re not on the board, the fact that they’re investing, the CEO still will spend more time with them and answer their calls.”

Cover Genius lands $70M infusion to grow its embedded insurance business

Seed VCs are turning to new ‘pro rata’ funds that help them compete with the big firms

by with No Comment Tech

Image Credits: Say-Cheese / Getty Images

Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets that gives them the right to buy more shares in a portfolio company during consequent funding rounds to maintain an ownership percentage and avoid dilution.

Still, while these rights are not exactly “earned,” they can be expensive. One of the latest trends in VC investing these days are funds dedicated to helping seed VCs exercise their pro rata rights. 

The problem is that in later rounds, the new lead investor will usually get its preferred allocation. Meanwhile, other new investors try to get what they can while existing investors have to pony up whatever the lead has agreed to pay per share if they want to exercise their pro rata rights. 

And, often, the new investors would prefer to squeeze pro rata investors out of the round altogether and take more for themselves. Meanwhile, founders want to cap the total chunk of their company they will sell in the round.

“It’s pretty common that a downstream investor will want to take as much of the round as they want, and will sometimes tell the founder they need an allocation that’s so large, it wouldn’t leave room for pro rata rights — essentially telling the founder to ask earlier investors if they would willingly waive their pro rata rights,” Edwards told TechCrunch. 

Earlier investors often have to rely on the founder “going to bat for us and pushing back on that request,” which will only happen if the investors provide enough value that they feel comfortable negotiating on the earlier investors’ behalf, he said.

Pro-rata is easier to get than ever today, but investors are thinking twice

Securing capital to stay in the game

Sometimes venture capitalists don’t choose to exercise their pro rata rights. While they obviously might pass on buying more shares in a struggling startup, they are often forced to pass up buying more of their winners, too, because they can’t afford them. 

Between 2020 and 2022 — during the VC investing frenzy years, for example — Edwards saw a lot of early-stage funds decline to exercise pro rata on later-stage rounds due to what he called “eye-popping valuations.”

Jesse Bloom, SaaS Ventures
Jesse Bloom, partner at SaaS Ventures.
Image Credits: SaaS Ventures /

Indeed, new investors in later rounds often run bigger funds than seed investors and can pay more per share, making it tough for early-stage investors and smaller funds to keep participating in later rounds.

This is where investment companies like Alpha Partners, SignalRank and now SaaS Ventures come in. All three deploy capital at the Series B level and later rounds to support seed-stage and Series A VCs who want to exercise their pro rata rights.

“When, for example, Sequoia invests in a Series A, other existing investors can participate,” SaaS Ventures partner Jesse Bloom told TechCrunch. “However, if you want to get in on the Series B, you have to be invited by Sequoia, the founder or were involved in the Series A. My job is to hear from my network that it is happening and find Series A investors and offer to stake them in their pro rata. I give them money to invest in their pro rata, and I get 10% of the carried interest.”

Most, if not all, of the names on the list of top-tier VC firms Bloom monitors for later-stage deals are those you recognize, from Andreessen Horowitz to Insight Partners to Valor Equity Partners.

He is also able to make quick decisions because, if a top-tier VC fund is leading a deal, he said he doesn’t have to do as much diligence, saying, “That’s the only way I can get in — I’m betting on the unfair advantage of the top guys.”

That’s another reason why he only invests in deals led by a list of the top 25 VC funds listed on its website, Bloom said. “We believe access beats diligence in the long run in later-stage venture capital and will do whatever it takes to gain access to deals led by our top funds, even if it means we don’t know as much about the company,” he said.

Bloom previously worked at Alpha Partners before SaaS Ventures leaders Collin Gutman, Brian Gaister and Seth Shuldiner hired him to raise a fund for them that would compete with Alpha.

He has now closed a new fund for SaaS Ventures with $24 million in capital commitments to invest in those pro rata opportunities. The new fund limited partnership is anchored by Pennington Partners, which manages multiple family offices. It is also backed by registered investment advisors who understand the advantages had by the large venture capital firms but are often unable to get in at the higher ticket sizes, Bloom said.

Bloom has made five deals already, including Apollo.io’s Series D and MaintainX’s Series C, both led by Bain Capital Ventures; Cover Genius’s Series E led by Spark Capital; and Elisity’s Series B round led by Insight Partners. 

Apollo.io, a full-stack sales tech platform, bags $100M at a $1.6B valuation

Pro rata boom

Bloom’s not alone in finding success for pro rata-targeted funds. Keith Teare’s SignalRank is going after a $33 million fund that it started raising in January, according to an SEC filing. Alpha is also raising a new fund to target pro rata, according to Steve Brotman, managing partner at Alpha Partners. The firm secured just over $125 million in capital commitments, and he expects to close at the end of July with over $150 million.

For many of the early investors on a company’s cap table, since many of them write $1 million to $3 million checks, pro rata is traditionally the only way they can get into these bigger deals, Bloom said. Similarly for founders, this type of deal supports their existing investors.

“We are essentially the LPs of their existing investors so they can have pro rata rights of anti-dilution,” he said. “At some point, the founders are going to cut out existing investors, so I give them access to very cheap and quick capital.”

As Root VC’s Edwards mentioned, two years ago, investors weren’t rushing to make pro rata deals. Today, that seems to be a different story. The pro rata game is heating up, according to Bloom and Brotman, who say much of this is coming from fewer deals being done at later stages, so there is more of a challenge getting access to those big-ticket deals. 

In the first quarter of 2024, $9.3 billion in capital was raised by VCs across 100 U.S. funds, which is just 11.3% of the $81.8 billion raised in the 2023 market, according to PitchBook-NVCA Venture Monitor. 

Steve Brotman, Alpha Partners
Steve Brotman, managing partner at Alpha Partners
Image Credits: Alpha Partners /

Investors said this leaves an abnormally high number of VCs unable to fund their pro rata rights. In fact, Brotman says as much as 95% of the time, investors aren’t doing their pro rata. 

“Pro rata rights and opportunity funds really boomed out in 2021 and 2022, then in 2023, there started to be a downward trend,” he told TechCrunch. “In 2024, very few funds are being raised by small funds. LPs are figuring this out. They did a lot of co-investing in 2022, and 2021 and got their asses burned, honestly, because they rushed in at massive valuations.”

He likened it to playing the card game Blackjack and if you have a certain hand, you can double down on your bet, depending on what the dealer is showing. “If you don’t double down when you can, the house wins. The same is true in venture capital, but no one’s bothered to talk about it,” he told TechCrunch. 

Well-known angel investor Jason Calacanis, founder and CEO of Inside.com and Launch, sat down with Brotman in May for his podcast, “Driving Alpha,” and told Brotman how if he had utilized his pro rata follow-on rights in his first fund, he could have tripled the returns, which already achieved a 5x return. So why didn’t he?

“Well, back in that day, you were trying to use your 100 swings at bat, or in the case of this $10 million, 109 swings, to hit one outlier based on the Power Law,” Calacanis said. In this case, the “Power Law” is where one single investment yields returns larger than all other investments combined.

Among institutions and family offices, risk and duration are affected right now, with duration “really being the killer,” Brotman said. Many of these institutions don’t have 10 to 15 years to prove their worth — more like three to six years, he said.

Venture capitalists need to double down on their winners and speak with their founders about why it’s important they do so. Also, if they can do their pro rata rights, they can often stick around on the board, which is important for early VCs, Brotman said.

“A big component of being a venture capitalist is being able to ride your unicorns,” he said. “Even if they’re not on the board, the fact that they’re investing, the CEO still will spend more time with them and answer their calls.”

Cover Genius lands $70M infusion to grow its embedded insurance business

Money flying off stack of bills in man's hand

Africa-focused funds find their feet amid a downturn

by with No Comment Tech

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].