Oui Capital, a pan-African early-stage VC agency, hits first shut of its $30M second fund – TechCrunch
Oui Capital, an Africa-focused VC agency primarily based in Lagos and Massachusetts, introduced at this time that it has accomplished the primary closing of its $30 million second fund, Oui Capital Mentors Fund II, because it seeks to strengthen its presence on the continent.
The agency, based in 2019 by Olu Oyinsan and Francesco Andreoli, launched its debut fund at $10 million. Since then, Oui Capital has made 18 investments in expertise sectors spanning totally different industries reminiscent of fintech, logistics & mobility, e-commerce, healthcare, and enterprise software program. Some names embrace TeamApt, MVX, Akiba Digital, Duplo, Ndovu, Maad, Intelligra, Aifluence and Pharmacy Marts.
Oui Capital made eight investments final 12 months and this second fund alerts the VC’s intention to maintain up with that tempo. The $30 million fund, identical to the primary, will again sub-Saharan startups within the pre-seed and seed levels. Up to now, the agency has reached its first shut at slightly over $11 million and expects to finish the ultimate shut by This autumn 2022.
Managing associate Oyinsan, in an interview with TechCrunch, mentioned Oui Capital’s first fund delivered early strong returns, with a MOIC (a number of on invested capital) in extra of seven instances. He mentioned that one of many the explanation why the agency managed to perform this lies within the “sparks” that decide which startup to spend money on or not: crew, market, information of the client and tech, and buyer enthusiasm.
However though companies observe a handbook (like Oui Capital and its aforementioned funding methods), not all offers prove nice finally. Oui Capital offers extra intensive help for a few of these startups by driving partnerships and gross sales, facilitating hires and offering bridge investments. With respect to follow-on capital, the managing associate mentioned Oui Capital makes such investments proactively as a part of the agency’s ongoing portfolio monitoring. Because it stands, Oui Capital has made follow-on investments in about 20% of its portfolio corporations.
“We go the additional mile with founders whom we associate with and this is the reason we preserve a comparatively smaller portfolio in comparison with many seed funds. Nevertheless, there’s a important distinction between the obligations of a VC as an investor and as a fund supervisor,” he added. “Being an investor begets the kind of die-hard optimism and help as earlier described. Being an efficient fund supervisor additionally places the fiduciary accountability on you to know when to cease devoting scarce sources to issues which may show too tough to repair and dedicate these sources to higher-performing corporations in your portfolio to reduce losses and maximize investor worth.”
Although financial cycles just like the one the startup world is experiencing are normally brief to medium-term, Oyinsan echoes what native buyers have communicated these previous few months: the return of sticking to first ideas and backing corporations with sturdy fundamentals, unit economics, and disciplined valuations. This occasion has created a possibility for buyers, together with Oui Capital, to speculate up the chain, particularly now that it has newly infused capital. In accordance with Oyinsan, the agency will likely be trying to cowl the total spectrum of investments earlier than Sequence A, together with bridge rounds, an exercise it’s going to amplify, significantly throughout this enterprise capital crunch. In relating information, Zedcrest Capital, one other agency, launched a $10 million ’emergency fund’ to bail out startups in pre-Sequence A levels final week.
From this new fund, Oui Capital intends to write down preliminary checks of as much as $750,000 (a 10x enhance from its ticket dimension when it launched its first fund) with reserves in place for such follow-on investments. “Count on us to be main many extra offers throughout the ecosystem and vocalizing agency initiatives — all issues that we’ve been doing quietly prior to now 4 years, however now trying to double down on these with the brand new fund,” Oyinsan added.
Oui Capital’s second fund welcomed a mixture of particular person and VC buyers as restricted companions. Particular person buyers reminiscent of Brad Feld, Seth Levine and Ryan McIntyre (Foundry Group’s companions), Gbenga Oyebode, Alitheia Capital’s Tokunboh Ismael, Idris Alubankudi, and TeamApt CEO Tosin Eniolorunda participated.
As one of many largest fintechs in Africa (when it comes to income and market capitalization), TeamApt is, for now, the breakout success of Oui Capital’s portfolio. The fintech, which in line with sources, is available in the market to lift a Sequence C spherical subsequent 12 months, stands as one of many continent’s touted soonicorns. Thus, Eniolorunda turning into a restricted associate on the agency is worthy of admiration as it’s such a uncommon feat in these elements for founders to develop into LPs within the funds that backed their startups. One other instance is Paystack CEO Shola Akinlade and pan-African early-stage fund, Ventures Platform.
“It’s a terrific suggestions loop for us as a VC agency and speaks to the power of our working relationship with TeamApt within the years even earlier than our funding within the firm,” Peter Oriaifo, principal at Oui Capital, instructed TechCrunch on Eniolorunda’s LP participation. “The founder-investor relationship is a testomony of our work to again a founder on the seed stage and to see the corporate succeed to some extent the place they wish to pay it ahead.”
Oui Capital invested in TeamApt when the fintech firm was underneath the radar and earlier than attracting the eye of different buyers. Its success is likely one of the inspirations behind Oui Capital’s pan-African strategy; the agency needs to make novel investments into startups it believes can develop into winners of their respective international locations and sectors. Oui Capital highlights Maad (the primary B2B market for fast-moving shopper items in Senegal ) and Pharmacy Marts (a B2B market for pharmacies in Egypt) as examples.
This technique has elevated the African international locations the place Oui Capital has made not less than one funding: Nigeria, Kenya, Senegal, Egypt, and South Africa. The agency plans to make extra investments in North Africa and Francophone Africa, areas that witnessed rising startup and enterprise capital exercise final 12 months when African tech funding hit file highs in correlation with international numbers.
“Our pan-African technique has made us a fund of selection for international LPs in search of publicity to the broader Africa alternative with out having to get into the weeds of understanding totally different areas individually,” acknowledged Oyinsan. The worldwide VCs concerned on this second fund embrace Angur Nagpal’s Vibe Capital, D International ventures, Boston-based One Manner Ventures and Floor Squirrel Ventures.