Oui Capital, a pan-African early-stage VC agency, hits first shut of its $30M second fund – TechCrunch

Oui Capital, an Africa-focused VC agency based mostly in Lagos and Massachusetts, introduced right this moment that it has accomplished the primary closing of its $30 million second fund, Oui Capital Mentors Fund II, because it seeks to strengthen its presence on the continent. 

The agency, based in 2019 by Olu Oyinsan and Francesco Andreoli, launched its debut fund at $10 million. Since then, Oui Capital has made 18 investments in expertise sectors spanning completely different industries similar to fintech, logistics & mobility, e-commerce, healthcare, and enterprise software program. Some names embody TeamApt, MVX, Akiba Digital, Duplo, Ndovu, Maad, Intelligra, Aifluence and Pharmacy Marts. 

Oui Capital made eight investments final yr and this second fund alerts the VC’s intention to maintain up with that tempo. The $30 million fund, identical to the primary, will again sub-Saharan startups within the pre-seed and seed phases. Up to now, the agency has reached its first shut at a bit over $11 million and expects to finish the ultimate shut by This autumn 2022. 

Managing accomplice Oyinsan, in an interview with TechCrunch, stated Oui Capital’s first fund delivered early stable returns, with a MOIC (a number of on invested capital) in extra of seven occasions. He stated that one of many explanation why the agency managed to perform this lies within the “sparks” that decide which startup to put money into or not: workforce, market, data of the client and tech, and buyer enthusiasm. 

However though corporations comply with a guide (like Oui Capital and its aforementioned funding methods), not all offers prove nice ultimately. Oui Capital offers extra in depth assist for a few of these startups by driving partnerships and gross sales, facilitating hires and offering bridge investments. With respect to follow-on capital, the managing accomplice stated Oui Capital makes such investments proactively as a part of the agency’s ongoing portfolio monitoring. Because it stands, Oui Capital has made follow-on investments in about 20% of its portfolio firms. 

“We go the additional mile with founders whom we accomplice with and this is the reason we preserve a comparatively smaller portfolio in comparison with many seed funds. Nonetheless, there’s a crucial distinction between the obligations of a VC as an investor and as a fund supervisor,” he added. “Being an investor begets the kind of die-hard optimism and assist as earlier described. Being an efficient fund supervisor additionally places the fiduciary accountability on you to know when to cease devoting scarce assets to issues which may show too tough to repair and dedicate these assets to higher-performing firms in your portfolio to reduce losses and maximize investor worth.”

The Oui Capital team

The Oui Capital workforce

Although financial cycles just like the one the startup world is experiencing are often brief to medium-term, Oyinsan echoes what native buyers have communicated these previous few months: the return of sticking to first rules and backing firms with robust fundamentals, unit economics, and disciplined valuations. This occasion has created a chance for buyers, together with Oui Capital, to take a position up the chain, particularly now that it has newly infused capital. In response to Oyinsan, the agency can be seeking to cowl the complete spectrum of investments earlier than Sequence A, together with bridge rounds, an exercise it’ll amplify, notably throughout this enterprise capital crunch. In relating information, Zedcrest Capital, one other agency, launched a $10 million ’emergency fund’ to bail out startups in pre-Sequence A phases final week. 

From this new fund, Oui Capital intends to put in writing preliminary checks of as much as $750,000 (a 10x improve from its ticket dimension when it launched its first fund) with reserves in place for such follow-on investments. “Anticipate us to be main many extra offers throughout the ecosystem and vocalizing agency initiatives — all issues that we’ve been doing quietly prior to now 4 years, however now seeking to double down on these with the brand new fund,” Oyinsan added. 

Oui Capital’s second fund welcomed a mixture of particular person and VC buyers as restricted companions. Particular person buyers similar to Brad Feld, Seth Levine and Ryan McIntyre (Foundry Group’s companions), Gbenga Oyebode, Alitheia Capital’s Tokunboh Ismael, Idris Alubankudi, and TeamApt CEO Tosin Eniolorunda participated. 

As one of many largest fintechs in Africa (when it comes to income and market capitalization), TeamApt is, for now, the breakout success of Oui Capital’s portfolio. The fintech, which in line with sources, is available in the market to lift a Sequence C spherical subsequent yr, stands as one of many continent’s touted soonicorns. Thus, Eniolorunda changing into a restricted accomplice on the agency is worthy of admiration as it’s such a uncommon feat in these elements for founders to change into LPs within the funds that backed their startups. One other instance is Paystack CEO Shola Akinlade and pan-African early-stage fund, Ventures Platform.

“It’s an incredible suggestions loop for us as a VC agency and speaks to the energy of our working relationship with TeamApt within the years even earlier than our funding within the firm,” Peter Oriaifo, principal at Oui Capital, instructed TechCrunch on Eniolorunda’s LP participation. “The founder-investor relationship is a testomony of our work to again a founder on the seed stage and to see the corporate succeed to a degree the place they need to pay it ahead.”

Oui Capital invested in TeamApt when the fintech firm was below the radar and earlier than attracting the eye of different buyers. Its success is without doubt one of the inspirations behind Oui Capital’s pan-African method; the agency needs to make novel investments into startups it believes can change into winners of their respective nations and sectors. Oui Capital highlights Maad (the primary B2B market for fast-moving client items in Senegal ) and Pharmacy Marts (a B2B market for pharmacies in Egypt) as examples.

This technique has elevated the African nations the place Oui Capital has made at the least one funding: Nigeria, Kenya, Senegal, Egypt, and South Africa. The agency plans to make extra investments in North Africa and Francophone Africa, areas that witnessed growing startup and enterprise capital exercise final yr when African tech funding hit file highs in correlation with international numbers.

“Our pan-African technique has made us a fund of selection for international LPs on the lookout for publicity to the broader Africa alternative with out having to get into the weeds of understanding completely different areas individually,” said Oyinsan. The worldwide VCs concerned on this second fund embody Angur Nagpal’s Vibe Capital, D World ventures, Boston-based One Approach Ventures and Floor Squirrel Ventures.

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