In Nigeria today, one can hardly think of an institution that is supporting the growth of startups without Ventures Platform coming to mind.
Founded on June 3, 2016, Ventures Platform has been actively finding, funding, and supporting innovative companies solving problems in Africa. Through its Ventures Platform Fund, it has invested in no less than 28 companies, in the fields of healthcare, financial services, agriculture, education, big data, and Internet infrastructure.
Prominent startups that have been funded by the Ventures Platform Fund include Paystack, Tizeti, PiggyVest, Thrive Agric, Printivo, Accounteer, ThankU Cash, Reliance HMO, Kudi, Trove Finance and Seamless HR.
Over the years, Kola Aina, the pioneer founder, has led activities of the funds with support from partner, Kayode Oyewole.
Today, we put the spotlight on the Africa-focused fund and how it’s gone — and goes — about investment.
What does venture capital mean to Ventures Platform Fund?
It’s primarily risk capital offered to innovative companies to allow them rapidly test out their core assumptions, find product-market fit, and fund growth obviously for some upside in the future for us as an investor and transformative impact in Africa.
As a VC fund, kindly tell us what businesses you are most interested in and why?
We are sector agnostic so we broadly fund companies across multiple sectors, however,
we seek out companies that innovate around inefficiencies in Africa and other emerging markets, companies that have figured out or are figuring out a way to deliver essential products and services to non-consumption markets, which account for a huge chunk of the consumer market.
Our thinking is pretty simple; in markets with extremely low purchasing power, people would only pay for products that fulfill a key job in their day-to-day operations.
What should a startup be doing to get your institution committing funds
Market! Market! Market! Go after a large and growing market. When a great team meets a lousy market, the market wins. When a lousy team meets a great market, the market wins. When a great team meets a great market, something special happens. Others would be a great team, smart, ambitious, and gritty founders with clear thinking and a deep sense of empathy for their target users.
By your organisation’s standards, what should a startup not be doing?
In the early days, a startup needs to be focused on three core things; building a great product, talking to users, and selling. Every other thing is a distraction; speaking at events, a fancy office, and attending conferences are massive distractions.
What is your average ticket size (give a range)?
We typically invest between $20,000 to $200,000 in our portfolio companies
What type of rounds do you support and why?
We usually like being the first or second cheque into a company, so we typically come
in at the pre-seed or seed stage, when the company has a minimum viable product, a few users, and has tested some of its key hypotheses.
This is also the stage where we can be most useful, helping the companies move from zero to one, helping them figure kinks around the product and distribution. For most of our investments, the constant feedback is that the value derived from being funded by Ventures Platform has far outweighed the cheques they received.
How do you deal with bad investments?
To be honest, it’s risk capital; as such you are bound to make bad investments. We consider those investments a learning curve.
We try to do a post-mortem to determine what went wrong. Was it a case of the market not being ready, a small market, bad founders, lack of adequate capital, or the product not just being good enough? We learn and we move on.
What investment has the fund regrettably passed on and why?
Kobo360 in its early days. At the time we passed, we had a company within the portfolio attempting to go after the same opportunity.
How can people reach you?
Founders can apply directly on our website. We are always on the lookout for founders solving really difficult problems across various industries.
Also, founders can send an email to [email protected]
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Nigerian startups raised $377m in 2019, more than twice what they did in 2018. Find out more when you download the full report.