Afrigather Ventures Platforms is one in all Africa’s most prolific startups. In eight years, it has invested in 78 startups, scoring large wins with Piggyvest, Remedial Well being, and Paystack—which Stripe acquired in October 2020 for over $200 million.
After these Nigerian successes, it’s turning its consideration exterior Nigeria and aiming to turn out to be extra pan-African. Since Kola Aina based Ventures Platform in 2016, it has solely invested in 12 non-Nigerian startups.
“Although we began from Nigeria and most of our investments are primarily based in Nigeria, we at all times got down to be a pan-African investor,” mentioned Dotun Olowoporoku, the managing accomplice of Ventures Platform.
The agency’s $46 million fund, which was launched in 2021, sometimes invests $250,000 to $1 million per startup. Because it deepens its roots exterior Nigeria, it can solely put money into “key strategic markets” with a secure political surroundings, homegrown expertise expertise, and angel traders. Its most up-to-date investments exterior Nigeria have been within the Francophone West Africa area, which satisfies these benchmarks.
“Startups solely breed the place the ecosystem has been put collectively,” mentioned Olowoporoku. In 2023, the sector-agnostic fund invested in twelve startups, making it probably the most energetic traders on the continent in a yr when funding declined 36% year-on-year.
In addition to its huge portfolio, Ventures Platform made its identify by being a hands-on investor for its startups. In November 2022, the agency appointed Damilola Teidi to guide a group solely centered on supporting its portfolio firms.
“As a founder whose aspiration is to construct a enterprise that generates a ton of free money circulation, there isn’t any higher fund. In my lowest second as a founder, after we went all the way down to zero income, Ventures Platform was there. Once I wanted to recruit expertise, Kola Aina had time on his calendar to talk to an engineer,” Njavwa Mutambo, the CEO of Caantin, a non-Nigerian Ventures Platform portfolio startup, advised TechCabal.
Ventures Platform: Lake versus Ocean Technique
VC investing is like fishing; you forged your internet into an enormous ocean and hope for the perfect. Whereas that’s a easy analogy, VCs and fishermen head to sea each time to take their probabilities primarily based on sturdy evaluation and hope for outsized returns.
For Ventures Platform, fishing both occurs in lakes or oceans. The Huge 4 (Nigeria, Kenya, Egypt, and South Africa) are seen as oceans the place a number of “sharks” can exist in the identical market and nonetheless thrive, whereas smaller ecosystems are seen as lakes the place there may be principally just one “shark.”
Francophone West Africa ties into the agency’s lake technique, because the agency sees the area as pockets of lakes. The agency will put money into startups within the area so long as they will “dominate the market rapidly,” come clean with 80% of the market share, and be capable of develop into neighbouring nations.
“It’s simple for firms to start out in Senegal, develop to Cote d’Ivoire and Cameroon, and turn out to be enormous companies with out coming to Nigeria,” Olowoporoku mentioned.
Nonetheless, buying a major market share will be costly and capital-intensive. In current months, the African tech ecosystem has adopted a extra conservative method to spending after the tip of the zero-interest charge coverage, which diminished startup funding.
However Olowoporoku advised TechCabal that his agency would nonetheless again a startup within the area that’s elevating cash to amass clients and may retain them. The agency not too long ago invested in Tanel, a medical health insurance firm, and its fourth funding in Senegal. This has not beforehand been reported.
Ventures Platform can be seeking to put money into Francophone West Africa, the place startups have a better path to exit as a consequence of French firms’ curiosity in getting into the area by acquisitions, in accordance with Olowoporoku. “We need to go to that market and search for firms that different individuals may need ignored as a result of they have a look at that market from a slender perspective,” he mentioned.
Ventures Platform’s GRMTT metrics
Enterprise capital corporations typically have a thesis for constructing their portfolios, and Ventures Platform is not any completely different. The agency has 5 stipulations for investing in a startup.
The agency considers a startup’s progress charge, which should be “unimaginable” earlier than it cuts a cheque. “Enterprise traders put money into high-growth firms,” Olowoporoku mentioned.
Ventures Platform additionally considers the startup’s income earlier than investing, because it solely invests in startups being profitable. The agency considers the startup’s income margin, which helps it decide valuation, and the range of the income supply, which can assist startups adapt to trade charge volatility. “Income is necessary as a result of it’s a mirrored image of whether or not they’re creating worth and whether or not somebody is prepared to pay for that worth,” Olowoporoku mentioned.
The agency additionally considers the present actuality of the market and the potential of the market wherein a startup operates earlier than investing. “A quick-growing enterprise in a capped market is much less helpful than a slowly rising enterprise in an uncapped market,” Olowoporoku mentioned.
