Ventures Platform, a highly active early-stage investment firm based in Lagos, Africa, has successfully closed $64 million so far for its second investment fund. The firm is actively working toward a final target of $75 million, according to information shared by founding partner Kola Aina with TechCrunch.
A notable investor in this round is the Nigerian government, contributing through its Investment in Digital and Creative Enterprises (iDICE) program. This contribution is particularly significant because it represents the very first time the Nigerian government has committed capital to a venture capital fund. This landmark investment underscores the strategic importance of Nigeria’s burgeoning startup community, which already produces the continent’s highest number of startup unicorns.
Other limited partners who have committed capital to Ventures Platform’s second fund include major global and regional institutions such as IFC, British International Investment (BII), Proparco, Standard Bank, MSMEDA, and AfricaGrow. The fund also attracted backing from key European family offices, including Alder Tree Investment, and influential international figures like former Y Combinator CEO Michael Seibel. Aina also mentioned a strong vote of confidence from existing backers, as 70% of the investors from their initial fund chose to return for this new vehicle.
Nigeria’s decision to choose Ventures Platform for this debut government investment is logical. Since its establishment in 2016, the firm has earned a solid reputation for its ability to identify high-potential startups in Nigeria at a very early stage. The firm now plans to duplicate this successful approach in other key African markets by leveraging its established networks.
Ventures Platform launched its first institutional investment vehicle, which totalled $46 million, in 2022. That initial fund was structured to focus predominantly on pre-seed and seed funding rounds. With the new, larger second fund, the firm will expand its investment scope to include Series A deals. Aina confirmed the goal is to be “investing with more conviction” and seeking larger ownership stakes in promising companies. This expanded focus on later-stage funding is welcome news for regional founders, given that securing Series A capital has become considerably more difficult due to reduced enthusiasm and pullback from prominent Silicon Valley firms in recent years.
Beyond its continued focus on strengthening its presence in Nigeria, Ventures Platform has strategically begun to build relationships and establish a footprint in emerging regions like Francophone West Africa and North Africa. By making initial investments in these areas, the firm aims to gain crucial early access to a broader pool of promising deals and entrepreneurs.
To date, this Pan-African venture capital firm has provided funding to over 90 different startups across the entire continent. The firm primarily targets what it describes as “painkiller” businesses—companies in sectors like fintech, health tech, agtech, edtech, and artificial intelligence (AI) that address issues of non-consumption. In simpler terms, these are businesses that provide essential services to markets where people previously had very little or absolutely no access to such provisions.
Aina highlighted the success of portfolio companies like Moniepoint, a Visa-backed unicorn, and Paystack, which is now owned by Stripe. These two fintech companies were pivotal in unlocking new markets for small business banking and facilitating online payments. He elaborated, “Many small businesses couldn’t sell beyond their immediate vicinity before Paystack because they couldn’t accept online payments. Moniepoint, on the other hand, has driven financial inclusion to the nooks and crannies of this country. That’s market creating innovation.” Other noteworthy investments include the remittance application LemFi (backed by Left Lane), human resources tech firm SeamlessHR (supported by the Gates Foundation), retail tech platform OmniRetail (backed by Norfund), QED-backed fintech Raenest, and the health technology company Remedial Health.
While innovation and overall funding in Africa’s tech ecosystem have been on a significant upward trend, surpassing $12 billion since 2015, key stakeholders are raising fresh concerns about a notable scarcity of successful exits and crucial liquidity events. This market reality has undeniably made the fundraising environment more difficult for many of the continent’s VC funds, most of which are emerging managers collectively facing a global slowdown over the last two years.
Despite this challenging market uncertainty, Ventures Platform successfully managed to attract both domestic and international Limited Partners (LPs) for two separate funds within this period. Aina explained, “We have LPs who understand how venture ecosystems in other markets have developed and know we’ll get there in the long term. Another reason is that we’ve recycled capital from our prior syndicates,” referencing the fact that the firm has successfully returned capital from four out of its six investment vintages (including five angel syndicates) between 2016 and 2022. The investor further stated that the first fund is competitively ranked among the top global performers based on its TVPI and IRR for its vintage year.
In addressing ongoing questions about the lack of exits and the continent’s recent funding slowdown (a drop from $5 billion in 2021 to $2 billion last year), Aina remains confident that Africa’s long-term potential has not diminished. He characterized the continent as the “purest asymmetric play for non-consensus alpha”—a term in venture capital that denotes high-risk, high-upside investment opportunities. He stressed the importance of looking beyond short-term fluctuations, asserting, “If you’re a global capital allocator looking for true diversification, Africa is the place. By 2050, one in four humans will be African. Our GDP growth rate is double that of the U.S., and yet most of the value is still offline. The opportunity is huge if you have the patience and the local context.”
