LoftyInc Capital, one of Africa’s most prolific investors known for placing early bets on eventual unicorns like Flutterwave, Andela, and Wave, has successfully secured substantial new capital. This fresh injection of funds is earmarked for investing in high-potential startups across the African continent. This successful fundraising comes at a time when funding volume and the number of deals in the African venture capital market saw only a minor decrease last year, according to a report published by the global VC firm Partech.
After more than a decade of focusing primarily on pre-seed and seed stage investments, LoftyInc Capital has reached the first close of its third fund, aptly named LoftyInc Alpha, at a robust $43 million. Shifting its focus from earlier efforts, this new fund will strategically target late-seed and Series A startups. It will maintain the firm’s established geographical concentration across key markets including Nigeria, Egypt, Kenya, and Francophone Africa, as confirmed by founder and managing partner Idris Ayo Bello to TechCrunch. This strategic change aims to maximize the fund’s impact in a rapidly evolving ecosystem.
The first close attracted a highly diverse group of Limited Partners (LPs). These investors include sovereign wealth funds from both the Middle East and Africa, such as MSMEDA from Egypt and Tunisia’s Anava Fund of Funds. Also participating were influential development finance institutions like FMO, Proparco (through its FISEA mechanism), AfricaGrow, IFC, and the U.S.-based First Close Partners. The funding round was rounded out by participation from various African high-net-worth individuals (HNIs) and several European family offices, demonstrating wide international support.
Bello, who first established LoftyInc’s initial investment vehicle back in 2012, is among a select group of investors who have directly observed and participated in Africa’s technological evolution. His firm has provided essential backing to startups through multiple phases of growth, ranging from the initial diversification of startups beyond pure fintech and the rapid emergence of skilled tech talent to the continent’s unicorn boom of 2021 and the more recent global funding slowdown.
The original pre-seed vehicle, which started as an angel network, has since grown into a thriving and self-sustaining community of more than 250 investors across both Africa and the diaspora. This network laid the crucial groundwork for LoftyInc’s first formally structured venture fund, which was launched five years later. In 2017, the Lagos-based VC firm secured its first institutional fund, raising $1.1 million exclusively from HNIs and deploying it entirely within Nigeria. Bello, who launched the fund alongside partners Marsha Wulff and Michael Oluwagbemi, proudly stated that the fund generated a strong 5.7x DPI (cash return) for its investors. This success was driven primarily by profitable exits and secondary sales from both Flutterwave and the General Atlantic-backed health tech company Reliance Health.
Building on this momentum, LoftyInc launched its second VC fund in 2021. It initially aimed for $10 million but ultimately closed significantly higher at $14.2 million. This second fund marked a strategic expansion, moving beyond Nigeria to embrace a broader pan-African investment approach, funding startups across markets like Egypt, South Africa, and Francophone Africa, all regions where LoftyInc intends to maintain an active presence. A significant investor in this second fund was Meta, through its NPE team, a transaction that marked the tech giant’s first and only investment to date in an African VC firm.
The firm is now focusing its strategy with the third fund to tackle a critical challenge in the African startup landscape: the alarmingly low rate at which companies successfully transition from seed stage to Series A. According to the Partech report, Africa’s VC ecosystem witnessed the most significant average ticket size declines last year at Series A (-18%) and Series B (-27%). Bello observed that while LoftyInc’s micro funds and angel networks have adequately covered the pre-seed and early-seed rounds, the major funding deficit truly emerges at the late-seed stage, where startups urgently require structured support to effectively scale operations and secure the necessary Series A capital.
He explained, “At pre-seed and seed, there’s a lot of hype, but by Series A, the questions investors ask are very different. Our goal is to come in at seed, but our mandate is to help you get to Series A. We want to be the firm that gets startups over that hump.” By positioning its portfolio companies strongly for Series A rounds, where LoftyInc plans to make follow-on investments and strategically introduce co-investors, the firm will also strengthen the investment pipeline “opportunistically” for top-tier African growth investors at the Series A and later stages, such as TLcom Capital, Partech, and Norrsken22.
Bello stated that LoftyInc distinguishes itself within the increasingly crowded African early-stage investment market by expertly leveraging its partners’ deep operational expertise and extensive networks. With a history of over 200 investments and 14 successful exits, the managing partner asserts that the firm provides far more than mere capital. It offers crucial benefits like market access, specialized business development support, and key investor matchmaking services to its portfolio companies, creating a holistic support system.
The firm has wisely expanded its leadership team with the launch of this latest fund to keep pace with its evolving investment strategy and growing portfolio. This move is crucial for enhancing regional expertise and execution, especially as it invests in startups that require tailored, localized support. Over the past two years, LoftyInc has welcomed Mariam Kamel and Kevin Simmons as general partners. They will apply their extensive experience in investment banking, angel investing, and operational VC across both the Middle East and Africa to help significantly deepen the firm’s presence in Africa’s eastern, northern, and Francophone regions. A minimum of 30% of the new fund is slated for deployment in these regions.
“They bring in fund and investor experience, which ties into our geographical expansion and exit plans,” Bello commented. He added that the established partners, Oluwagbemi and Wulff, will continue to manage LoftyInc’s previous funds while also supporting the essential transition into this larger, more formally structured new fund.
LoftyInc Alpha has stated its core mission is to back innovations that are fundamentally driving Africa’s “everyday economy.” The majority of its investments will center around financial services, which remains the most dominant sector in African technology, accounting for 60% of the over $2 billion in equity deals raised by startups last year. Other focus areas include logistics and transport, health tech, retail, climate-focused solutions, and deep tech and artificial intelligence (AI) where these technologies act as crucial enablers across the other core sectors. Bello confirmed that the fund intends to invest in a total of 20-25 companies, with initial check sizes averaging $1 million and potential follow-on investments reaching up to $5 million. The firm’s portfolio already includes several notable startups, such as the Uber-backed vehicle financing platform Moove, Egypt’s Robinhood-style trading application Thndr, and the African B2B e-commerce platform OmniRetail.
