LoftyInc Capital has reached the first close of its third fund, which it plans to deploy to late seed and Series A startups across Africa. The firm counts Flutterwave, Moove, Reliance Health, TalentQL, OmniRetail, and Thndr among its portfolio companies.
LoftyInc Alpha, its largest fund till date, has received the backing of development finance institutions such as Proparco, International Finance Corporation (IFC), Dutch development bank FMO, AfricaGrow, and First Close Partners. Other limited partners include Anava Funds of Funds, Egypt's MSMEDA, European family offices, and African high-net-worth individuals.
“This investment will provide seed-stage equity financing to tech startups across Africa, including nascent markets such as Francophone Africa,” said Farid Fezoua, Global Director for Disruptive Technologies, Services, and Funds at IFC. “The Alpha Fund will help develop the venture capital ecosystem across Africa and create a pipeline of investment projects that can attract later-stage investors to the region, which is underserved by global venture capital."
Previously, LoftyInc invested in pre-seed and seed startups, but as African startups struggle to reach the Series A stage, it is stepping up to make that transition easier.
“At pre-seed and seed, there’s a lot of hype, but by Series A, the questions investors ask are very different. Our goal is to come in at seed, but our mandate is to help you get to Series A. We want to be the firm that gets startups over that hump,” Idris Ayodeji Bello, Founder and Managing Partner said to TechCrunch.
LoftyInc's decision to focus on this crucial stage comes as funding for African startups declines, mirroring the slowdown in global VC activity. It also potentially provides it with faster exit opportunities to Series A investors such as TLCom and Partech. It already has 14 exits from early bets in startups that include Flutterwave, Appruve, and Reliance Health.
Having made more than 200 early-stage investments, LoftyInc has beefed up its team with the addition of Mariam Kamel and Kevin Simmons as general partners. Both bring investment banking and VC experience to the firm. Meanwhile, Marsha Wulff and Michael Oluwagbemi will continue managing its previous fund.
Having started out investing in Nigeria, LoftyInc has slowly expanded its focus to take on a more pan-African approach, which it intends to continue in this new fund.
At least 30% of the fund will be deployed in East Africa, North Africa, and Francophone Africa where it already has Ejara, Chefaa, and Gahez Market as portfolio companies. It will also retain its sector agnostic approach with healthtech, retail, deep tech, and artificial intelligence a few focus areas.
Written by Omoruyi Edoigiawerie, a seasoned startup attorney with over a decade of experience. Learn more.
“Our previous funds were backed primarily by African professionals and experienced entrepreneurs who not only provided capital but also leveraged their networks and industry expertise to help startups thrive — establishing the foundation for institutionalising our investment approach," Bello said about the new fund.
"In an exceptionally challenging fundraising climate, we are thrilled to have surpassed our first-close target, attracting new institutional investors while reaffirming the commitment of our existing backers. This latest raise positions us to scale our vision: empowering Afropreneurs who build transformative, tech-driven solutions for Africa’s everyday economy.”
