Oui Capital, an early-stage VC firm in Africa, hits the first close of a second $30 million fund – TechCrunch
The capital city of Ouian Africa-focused VC firm based in Lagos and Massachusetts, today announced that it has completed the first round of its $30 million second fund, Oui Capital Mentors Fund II, as they seeks to strengthen its presence on the continent.
The company was founded in 2019 by Olu Oyinsan and Francesco Andreoli, launched its first fund with $10 million. Since then, Oui Capital has made 18 investments in technology sectors spanning various industries such as fintech, logistics & mobility, e-commerce, healthcare and enterprise software. Some names include TeamApt, MVXAkiba Digital, DuploNdovu, Maad, Intelligra, Aifluence and Marts Pharmacy.
Oui Capital made eight investments last year, and this second fund signals the VC’s intention to keep up that pace. The $30 million fund, like the first, will support startups in sub-Saharan Africa in the pre-seed and seed stages. So far, the company has hit its first close with a little over $11 million and expects to complete its final close in Q4 of 2022.
Managing partner Oyinsan, in an interview with TechCrunch, said that Oui Capital’s first fund soon delivered solid returns, with MOICs (multiple on invested capital) exceeding 7x. He said that one of the reasons why the company managed to achieve this lies in “spark “ decide which startup to invest in: team, market, customer and technology knowledge, and customer enthusiasm.
But even if companies follow the guidebook (like Oui Capital and the aforementioned investment strategies), not all deals end up being great. Oui Capital offers broader support to some of these startups by fostering partnerships and sales, facilitating hiring, and providing bridging investments. As for further funding, the managing partner said Oui Capital makes such investments proactively as part of the company’s ongoing portfolio monitoring. Currently, Oui Capital has made follow-up investments in about 20% of the companies in its portfolio.
“We go further with the founders we partner with and this is why we maintain a relatively smaller portfolio than many seed funds. However, there is an important distinction between the VC’s responsibilities as an investor and as a fund manager,” said the managing partner.
“Becoming an investor brings optimism and full support as described earlier. Being an effective fund manager also places a fiduciary responsibility on you to know when to stop dedicating scarce resources to problems that may be too difficult to fix and to dedicate these resources to companies. perform better in your portfolio to minimize losses and maximize investor value. “
While economic cycles like the one the startup world is going through are often short-to-medium-term, Oyinsan echoes what domestic investors have been communicating over the past few months: a return to business. adheres to first principles and supports companies with strong fundamentals, unit economics, and disciplined pricing. This event has created an opportunity for investors, including Oui Capital, to invest in the chain, especially when the company is new to funding.
According to Oyinsan, the company will seek to include the full range of pre-Series A investments, including demand rounds, an activity it will amplify, especially in the current phase of venture capital. In related news, Zedcrest Capital, another VC firm, launched a $10 million ’emergency fund’ to bail out startups in the pre-Series A stage last week.
From this new fund, Oui Capital intends to write an initial check of up to $750,000 (10x the ticket size of the first fund) with reserves set aside for such subsequent investments. “Hopefully we will lead even more deals across the ecosystem and launch corporate initiatives – all of which we have been quietly working on for the past four years, but are now looking for.” how to double these deals with the new fund,” added Oyinsan.
Oui Capital’s second fund has welcomed a mix of individual investors and VCs as limited partners. Individual investors such as Brad Feld, Seth Levine and Ryan McIntyre (Foundry Group partner), Gbenga Oyebode, Alitheia Capital’s Tokunboh Ismael, Idris Alubankudi and TeamApt CEO Tosin Eniolorunda participated.
As one of the largest fintechs in Africa (in terms of revenue and market capitalization), TeamApt is now the breakout success of Oui Capital’s portfolio. Fintech technology, according to sources, will be on the market to raise Series C next year, being one of the continent’s highly regarded soonicorns. Therefore, Enilorunda becoming a limited partner of the company is something to be admired as it is a rare feat in these divisions for founders to become LPs in the fund supporting startups. their profession. Another example is Paystack CEO Shola Akinlade and early stage Africa fund, Venture Platform.
“It was a great feedback loop for us as a VC company and speaks volumes about the strength of our working relationship with TeamApt in the years even before we invested in the company. company,” Peter Oriaifo, principal at Oui Capital, told TechCrunch about Eniolorunda’s LP involvement. “The founder-investor relationship is testament to our work to support a founder at the seed stage and to see the company succeed to the level they want to return. after”.
Oui Capital invested in TeamApt when the fintech company was in the spotlight and before attracting the attention of other investors. Its success is one of the inspirations behind Oui Capital’s pan-Africa approach. Oyinsan said the company wants to make new investments in startups that it believes can become winners in their respective countries and sectors. Oui Capital highlights Maad (the first B2B marketplace for FMCG in Senegal) and Pharmacy Marts (a B2B marketplace for pharmacies in Egypt) as examples.
As a result, the African countries where Oui Capital has invested at least once include Nigeria, Kenya, Senegal, Egypt and South Africa. The company plans to invest more in North Africa and French-speaking Africa, regions that have seen increased venture capital and start-up activity in the last year as Africa tech funding hits record high relative to the global number.
“Our pan-Africa strategy has made us the fund of choice for global LPs looking to reach broader Africa without having to dig deep into regions,” said Oyinsan. different areas”. Global VCs participating in this second fund include Angur Nagpal’s Vibe Capital, D Global Ventures, One Way Ventures and Boston-based Ground Squirrel Ventures.