Ventures Platform, one of Africa’s most active early-stage investors, has raised another $64 million

Based in Lagos, Ventures Platform has successfully raised $64 million for its second investment fund, aiming for a final target of $75 million, according to founding partner Kola Aina. Notably, this fund includes an investment from the Nigerian government through its iDICE initiative, marking a historic moment as it is the first time Nigeria has invested in a venture capital fund. The Nigerian startup ecosystem, recognized for hosting the highest number of unicorns on the continent, is poised to benefit from this funding. Alongside the government, other notable limited partners in this new fund include the International Finance Corporation (IFC), British International Investment (BII), Proparco, Standard Bank, MSMEDA, and AfricaGrow. Additionally, European family offices such as Alder Tree Investment and notable global figures like former Y Combinator CEO Michael Seibel have also contributed. Aina mentioned that approximately 70% of the investors from their previous fund have returned, reflecting confidence in Ventures Platform's ability to identify promising startups early. Since its inception in 2016, the firm has built a strong reputation for recognizing emerging businesses in Nigeria, and it aims to extend this success to other African nations. Having launched its first institutional fund of $46 million in 2022, primarily focusing on pre-seed and seed investments, the new fund will also include Series A funding. Aina expressed the firm’s intent to invest with greater conviction, seeking larger ownership stakes in startups, which is vital for founders, especially as Series A funding has become increasingly competitive. While Ventures Platform is solidifying its presence in Nigeria, it is also expanding into Francophone West Africa and North Africa, regions where it has already made strategic investments. To date, the firm has supported over 90 startups across the continent, with a significant focus on 'painkiller' businesses in sectors like fintech, healthtech, agritech, edtech, and AI. These companies aim to address markets with limited access to essential services. Highlighting successful portfolio companies, Aina pointed to Moniepoint and Paystack, two fintech solutions that have revolutionized online payments and banking for small businesses in Nigeria. He emphasized the transformative impact of these innovations on financial inclusion in underserved areas. Despite the rapid growth of Africa’s tech ecosystem, which has attracted over $12 billion in funding since 2015, concerns regarding exits and liquidity events persist. This challenging landscape has complicated fundraising for many venture capital firms, particularly emerging managers. However, Ventures Platform has managed to secure backing from both local and international investors for its two funds amid market volatility. Aina noted that their ability to recycle capital from previous syndicates has contributed to their success, as they returned four out of six vintages, including five angel syndicates, between 2016 and 2022. He also mentioned that the first fund ranks among the top performers globally based on TVPI and IRR metrics. Addressing the ongoing discussions around exit strategies and the slowdown in funding—dropping from $5 billion in 2021 to $2 billion last year—Aina remains optimistic about Africa's long-term potential. He described the continent as the 'purest asymmetric play for non-consensus alpha,' suggesting that for investors seeking true diversification, Africa represents a significant opportunity. With projections indicating that by 2050, one in four people will be African, the region's GDP growth rate surpassing that of the U.S., and much economic value still untapped, Aina believes the prospects are substantial for those willing to invest with patience and local insight.