Ventures Platform has raised an oversubscribed $83 million second fund as the Pan-African venture firm expands beyond its home market of Nigeria with a strategy shaped by a tougher, more selective venture market. The firm plans to back early-stage founders across a range of sectors, including fintech, healthcare, SaaS and other areas “where technology can address essential needs and build large, enduring businesses,” Kola Aina, the firm’s founding partner, told TechCrunch. The first fund focused primarily on pre-seed and seed rounds.
Now, Ventures Platform is back with a larger fund and wider geographic mandate. The firm is expanding its focus beyond Nigeria and has already written checks from Fund II to five companies based in Kenya, South Africa, and Egypt. Check sizes will be up to $3 million, and the firm hopes to deploy the capital over the next three to four years.
The fundraising process took about a year and a half, with Aina describing the environment as more “selective,” than it was when Ventures Platform raised Fund I. From his perspective, the market is still cautious, as LPs demand more evidence that managers can turn portfolio value into realized returns. Capital is no longer assumed to be unlimited, especially after many LPs felt burned by the venture bust a few years ago.
Last year, startups on the continent raised $1.16 billion across 447 deals. As TechCrunch previously reported, the venture market is now a barbell — with LPs giving capital to a handful of firms at the top and to emerging managers with a track record they can trust. Today, LPs expect proof,” Aina said, adding that this discipline is actually healthy for the market.
LPs want to know more about access to top talent, how funds are navigating individual markets, and “why you have the right to win,” Aina said. This latest generation of founders and fund managers has seen what it is like to deal with both an abundance of capital and hardly any at all. He said it’s more important than ever to understand the institutional and market realities founders face while also connecting companies to regional and global networks as they scale.
That pitch seems to have resonated with existing investors: 70% of Fund I’s LPs returned for Fund II. Backers include the European Bank for Reconstruction and Development, Norfund (Norway’s development finance institution), and Ghana’s Ashesi University Foundation.
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