Yes Capital, a pan-African early-stage venture capital firm, achieves the first closing of its second $30 million fund – TechCrunch


Oui Capital, an Africa-focused venture capital firm based in Lagos and Massachusetts, today announced that it has completed the first closing of its second $30 million fund, Oui Capital Mentors Fund II. , as it seeks to strengthen its presence on the continent.

The firm, founded in 2019 by Olu Oyinsan and Francesco Andréoli, launched its first $10 million fund. Since then, Oui Capital has made 18 investments in technology sectors spanning different industries such as fintech, logistics and mobility, e-commerce, healthcare and enterprise software. Some names include TeamApt, MVX, Akiba Digital, Duplo, Ndovu, Maad, Intelligra, Aifluence, and Pharmacy Marts.

Yes Capital made eight investments last year and this second fund signals the VC’s intention to keep up with that pace. The $30 million fund, like the first, will support sub-Saharan startups in the pre-seed and seed stage. So far, the company has reached its first close at just over $11 million and expects to complete the final close by Q4 2022.

Managing Partner Oyinsan, in an interview with TechCrunch, said Oui Capital’s first fund delivered strong early returns, with an MOIC (multiple on invested capital) of more than 7x. He said that one of the reasons the company has been able to accomplish this is the “Sparks” which determine in which startup to invest or not: team, market, knowledge of the customer and the tech, customer enthusiasm.

But even if companies follow a playbook (like Oui Capital and its aforementioned investment strategies), not all deals end up being good. Oui Capital provides broader support to some of these startups by driving partnerships and sales, facilitating hires, and providing bridge investments. Regarding follow-on capital, 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-on investments in approximately 20% of its portfolio companies.

“We go the extra mile with the founders we partner with and that’s why we maintain a relatively smaller portfolio compared to many seed funds. However, there is a key distinction between the responsibilities of a VC as an investor and as a fund manager,” the managing partner said.

“Being an investor engenders the kind of unconditional optimism and support described earlier. Being an effective fund manager also gives you the fiduciary responsibility to know when to stop spending scarce resources on problems that may prove too difficult to solve and to devote those resources to the best performing companies in your portfolio to minimize the losses and maximize value for investors.

The Yes Capital team

Although economic cycles like the one experienced by the startup world are usually short to medium term, Oyinsan echoes what local investors have communicated in recent months: the return of respect for the basic principles and support for businesses to solid fundamentals, unit economics and valuation discipline. This event created an opportunity for investors, including Oui Capital, to invest in the chain, especially now that it has newly infused capital.

According to Oyinsan, the company will seek to hedge all pre-Series A investments, including seed rounds, an activity it will amplify, especially during the current venture capital crisis. In related news, Zedcrest Capital, another venture capital firm, launched a $10 million “emergency fund” last week to bail out pre-Series A startups.

From this new fund, Oui Capital intends to issue initial checks of up to $750,000 (a 10x increase over the note size of its first fund) with reserves in place for such follow-up investments. “Expect us to lead many more transactions in the ecosystem and voice corporate initiatives – all things we’ve done quietly over the past four years, but are now looking to double down on with the new fund,” Oyinsan added.

Oui Capital’s second fund welcomed a mix of individual investors and venture capitalists as sponsors. Individual investors such as Brad Feld, Seth Levine and Ryan McIntyre (foundry group partners), Gbenga Oyebode, Tokunboh Ismael of Alitheia Capital, Idris Alubankudi and TeamApt CEO Tosin Eniolorunda participated.

As one of Africa’s largest fintechs (by revenue and market capitalization), TeamApt is, for now, the smash hit in Oui Capital’s portfolio. The fintech, which sources say is in the market to raise a Series C round next year, is shaping up to be one of the continent’s soon to be lauded. Thus, Eniolorunda becoming a limited partner of the company is worthy of admiration as it is such a rare feat in these regions for founders to become LPs in funds that have backed their startups. Another example is the CEO of Paystack, Shola Akinlade, and the pan-African start-up fund, Ventures Platform.

“It’s a great feedback loop for us as a venture capital firm and speaks to the strength of our working relationship with TeamApt in the years even before our investment in the company,” said Peter Oriaifo, Director from Oui Capital, to TechCrunch about Eniolorunda’s stake in LP. “The founder-investor relationship is a testament to our work to support a seed-stage founder and see the company succeed to a point where it wants to pay it forward.”

Oui Capital invested in TeamApt when the fintech was under the radar and before it caught the attention of other investors. Its success is one of the inspirations of Oui Capital’s pan-African approach. The company wants to make new investments in startups it believes can become winners in their respective countries and sectors, Oyinsan said. Oui Capital highlights Maad (the leading B2B marketplace for fast-moving consumer goods in Senegal) and Pharmacy Marts (a B2B marketplace for pharmacies in Egypt) as examples.

Accordingly, the African countries where Oui Capital has made at least one investment are Nigeria, Kenya, Senegal, Egypt and South Africa. The company plans to make more investments in North Africa and Francophone Africa, regions that saw an increase in start-up and venture capital activity last year when African tech funding hit highs. record highs correlated with global figures.

“Our pan-African strategy has made us a fund of choice for global LPs looking for exposure to the opportunity of the wider Africa without having to jump into understanding the different regions separately,” said Oyinsan. Global VCs involved in this second fund include Angur Nagpal’s Vibe Capital, D Global Ventures, Boston-based One Way Ventures and Ground Squirrel Ventures.

Tech

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button