Africa-focused venture capital firm TLcom has announced a first close of $70m for its $150m tech fund, which will focus on fast-growing, tech-enabled African startups in Egypt and East and West Africa.
The firm, which has offices in Nairobi, Lagos and London, expects to add an additional 20 early-stage startups to its portfolio with an emphasis on Seed and Series A stages, with ticket sizes ranging from $500,000 to $15m. It will target businesses in sectors including fintech, mobility, agriculture, healthcare, education and ecommerce. A second close of the fund is expected later in 2022.
The pandemic has seen a raft of African startups reach unicorn status (valued at $1bn or more), including Egyptian payments firm Fawry, Nigerian payments company Flutterwave and Senegal-based mobile money provider Wave.
Maurizio Caio, Nairobi-based founder and managing partner at TLcom, said that the fundraising signals an optimistic African tech sector.
“Since the closing of our previous fund, African tech has secured more high-value financing rounds, exits and M&As than ever before and this is only just the beginning.
“It is becoming increasingly evident that our sector has broken into a new era of maturity driven by very strong business fundamentals that African founders are demonstrating not only in the fintech space, but across a huge number of the continent’s largely underserved markets.”
Investors in the fund’s first round include German insurance giant Allianz through its AfricaGrow joint venture with DEG Impact, Germany’s development finance institution, as well as German media conglomerate Bertelsmann, King Philanthropies and FBNQuest.
Development Finance Institutions (DFIs) who have invested include CDC Group (the UK DFI soon to rebranded as British International Investments), IFC, Proparco and Swedfund.
TLcom has over $350m worth of funds under management across primary and secondary funds. Existing African investments, made through its TIDE Africa Fund, include Andela, Okra, Twiga Foods, uLesson and others.
Andela, which places African tech talent with global firms, reached unicorn status in 2021 after raising $200m in Series E funding, valuing the firm at over $1.5bn.
Caio said that the new fund would have a special emphasis on female entrepreneurs.
TLcom’s senior team includes Caio, senior partner Omobola Johnson in Nigeria, and partners Andreata Muforo in Kenya, and Ido Sum in the UK.
Martin Ewald, lead portfolio manager for impact investments at AfricaGrow/Allianz Global Investors, said, “One thing is clear to those who are close to the African VC market: it will grow.
“We at AfricaGrow believe much more is possible in terms of capital influx into the continent especially in the VC space. There is considerable upside for everyone if investment activities accelerate even more: African businesses can boost productivity, gain in terms of competitiveness and technological edge and tens of millions more Africans could gain stable employment while generating returns for investors.”
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