Pan-African venture capital fund Launch Africa Ventures has closed its $36.3 million fund, which it used primarily for investments in B2B and business-to-business-to-consumer startups.
According to an announcement on its website Tuesday (June 14), the Mauritius-based company has helped 108 startups in 21 African countries, including Kuda, a neobank based in Nigeria, and Kenyan B2B eCommerce retail platform MarketForce.
Managing partner Zachariah George said Launch Africa would continue to expand its geographic footprint and invest in startups in other countries.
“I can’t think of a single fund that covers many markets as we do,” he said. “We’re doing deals in the DRC, Madagascar, Sudan, Botswana, Benin, Togo. People use the word pan-African loosely, but when we say pan-African, we truly mean what we do.”
Launch Africa has more than 238 retail and institutional investors from 40 nations and has invested more than $24 million in its portfolio companies. In most cases, these investments are one-time checks, as the early-stage VC seldom invests in subsequent rounds.
“In fund one, we have limited capacity for follow-ons. If we were to reserve a significant portion of our fund for follow-ons like many other funds do, we wouldn’t be able to cover the whole continent and multiple regions and products,” said George. “Any of our portfolio companies that need significant capital at the next round of funding, we provide an opportunity for our LPs to back them.”
PYMNTS spoke earlier this year with Launch Africa’s general partner Janade Du Plessis about the funding imbalance in Africa’s VC space.
Of the $5 billion that was invested in that sector in 2021, the bulk of the money went to the region’s top recipients of venture capital such as Nigeria, Kenya, South Africa and Egypt, and primarily to later-stage investment rounds like Series A, Series B and Series C.
According to Du Plessis, this underscores the need for more capital at the seed stage, where it can take founders almost two years to raise between $500,000 and $2 million.
“It’s almost like a relay race,” he said. “You need enough angel investors, enough seed investors and then they can go into your venture funds.”