Capital Markets

Venture company raises Sh8bn for Africa tech startups

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A trader counting money. FILE PHOTO | NMG

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Summary

  • The firm, which has offices in Nairobi, Lagos and London, has made investments in a number of Kenyan startups including Twiga Foods, Ajua and Kobo360.
  • The new capital is part of a larger $150 million (Sh17 billion) being raised by the Africa-focused tech fund, with the firm expecting to close another tranche by the end of the year.
  • The new funds were raised from private sector investors including insurance firm Allianz, Bertelsmann, King Philanthropies and FBNQuest.

Venture Capital firm TLcom has raised Sh8 billion ($70 million) in new capital for onward investment in startups in the region.

The firm, which has offices in Nairobi, Lagos and London, has made investments in a number of Kenyan startups including Twiga Foods, Ajua and Kobo360.

The new capital is part of a larger $150 million (Sh17 billion) being raised by the Africa-focused tech fund, with the firm expecting to close another tranche by the end of the year.

“The new fund will expand TLcom’s existing focus on fast-growing, tech-enabled African businesses to Egypt, as well as strengthen its long-standing presence in East and West Africa,” the firm said in a statement.

“TLcom plans to add another 20 early-stage firms to its portfolio, with ticket sizes ranging from $500,000 (56.8 million) to $15 million (Sh1.7 billion) across Seed and Series A stages and will target entrepreneurs tackling some of the continent’s most complex challenges in sectors including fintech, mobility, agriculture, healthcare, education and ecommerce.”

The new funds were raised from private sector investors including insurance firm Allianz, Bertelsmann, King Philanthropies and FBNQuest.

A number of development finance institutions including DFIs the UK’s CDC Group, the World Bank’s International Finance Corporation (IFC), Proparco and Swedfund also participated in the funds drive.

TLCom was founded in 1999 and has so far deployed investments worth Sh39.7 billion ($350 million) in companies on the continent.

Venture capital and private equity funds have found Africa a rich ground for investing in startups in previously underserved and fast-growing sectors of the economy in the past decade.

They are attracted by high returns —although risk is high— with family offices and finance institutions in the west providing them with capital.

Such funds provide African startups and SMEs with much-needed capital that they would otherwise struggle to get from formal financial institutions such as banks, while also providing technical expertise that the small firms need in order to grow their operations.

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