After learning the ropes of financial due diligence and investments at Ingressive Capital, a Pan-African venture capital firm, Olu Oyinsan left his role as Vice President, Investments in 2018 to start his firm, Oui Capital.
He had also previously worked in the early stage startup practice at Silicon Valley Bank.
Officially launched in January 2019, Oui Capital wanted to bridge the funding gap for African startups by offering pre-Series A financing.
Speaking with Oyinsan who is the firm’s managing partner, we put the spotlight on the VC firm as he provides insights that will help many African entrepreneurs on their journey.
Tell us how Oui Capital came about
By 2017, there was more early-stage capital flowing into the tech ecosystem. However, we noticed that there was a dearth of talent and experience to make capital more efficient.
After speaking to a ton of founders in Africa about this gap, we decided to put together a support vehicle for founders that consisted of both capital and access to high-quality mentorship.
So I started Oui Capital in December 2018 with Francesco Andreoli, who is also very passionate about the African startup space. Some of our interactions revealed that there is a continuing disparity in the amount of capital available for prolific, high-growth startups across sub-Saharan Africa as compared with other regions and as such, we wanted to address this imbalance.
What does VC investment mean to Oui Capital?
VC investment for us means the unique opportunity to use capital as a tool for equity. We view every investment as an opportunity to allocate resources to the most brilliant founders building the most potentially impactful businesses on the African continent.
Who runs Oui Capital?
As founding partners, we both run Oui Capital.
How did Oui Capital begin investing in startups?
We began investing almost immediately after launching in late 2018. By Q1 2019, we had already closed two investments in MVXchange and AWA Bike, two companies in mobility and logistics. Currently, we have a portfolio of eight companies spread across Nigeria, Kenya, Zimbabwe, Mauritius, and the United States.
Every VC has an eye or eyes in certain markets, kindly tell what market Oui Capital is interested in and why?
The future is indubitably African, and we are very excited to be investing in African technology startups and businesses that are helping to propel this vision of an economically vibrant and sustainable continent.
While our focus is by and large African, we are open to investing in other emerging markets as well in startups that are leveraging scalable technologies on the African continent.
How do you determine that a startup is investible?
Many things are considered when deciding whether a startup is investible, but there are three major things we look at as a fund.
Is the team passionate and competent enough to deliver on the vision? Is the business idea solid enough to become a profitable business? Will the business generate significant positive impact?
By Oui Capital’s standards, what shouldn’t a startup be doing?
We believe that a startup should not be building a product that they have not validated. Many times you see startups making significant investments in building applications for products that are based on hunches or intuition, and this leads to those companies being less capital efficient.
At what stage of growth do you usually invest in startups?
We are an early-stage VC and so we invest primarily in pre-seed and seed rounds of companies preferably with valuations less than $10 million.
What is Oui Capital’s average ticket size?
Our average ticket size is between $60,000 and $70,000 for the first cheques.
How does Oui Capital deal with bad investments?
We look at dealing with bad investments under three different buckets.
When we notice a company is struggling, our first reaction is to give it as much as we can to help it get back on its feet, whether it be product business development or financing.
The second thing is being able to quickly identify a case that cannot be remedied and discontinue channelling our resources in that direction; this helps us to be efficient in our portfolio support strategy.
Lastly, the most useful outcome of an investment that did not go well is the opportunity to learn from it, both for us as investors and the founders. We document our learnings from bad investments to help us improve our process and our investment acumen.
What industries are of most interest to you?
We are particularly interested in startups playing in logistics, fintech, education, and healthcare.
What investment opportunities have you regrettably passed on and why?
In recent times, there have been investments that the team had mixed feelings about and passed on. However, it is too early to tell if these would be categorised as regrets because it takes time for companies to mature.
Which startups are currently in your portfolio?
How can startup founders reach you?
We pride ourselves on being quite accessible. Founders can always fill out the Pitch for Yes form on our website or connect with us via our social media channels. Alternatively, they can send a mail to [email protected]
Report: Millionaire West African startups” raised over $1.806 billion between 2010 and 2019, 97.9% of which went to Nigerian startups. Get a free overview and 50% purchase discount here.
Listen to Built in Africa, a podcast by Techpoint Africa