Oui Capital, an Africa-focused VC agency primarily based in Lagos and Massachusetts, introduced right this moment 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 embody TeamApt, MVX, Akiba Digital, Duplo, Ndovu, Maad, Intelligra, Aifluence and Pharmacy Marts.
Oui Capital made eight investments final yr and this second fund indicators 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. To this point, the agency has reached its first shut at a bit over $11 million and expects to finish the ultimate shut by This fall 2022.
Managing associate Oyinsan, in an interview with TechCrunch, stated Oui Capital’s first fund delivered early stable returns, with a MOIC (a number of on invested capital) in extra of seven occasions. He stated that one of many the reason why the agency managed to perform this lies within the “sparks” that decide which startup to put money into or not: staff, market, data of the shopper and tech, and buyer enthusiasm.
However although corporations comply with a guide (like Oui Capital and its aforementioned funding methods), not all offers prove nice finally. Oui Capital offers extra intensive assist 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 stated 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 firms.
“We go the additional mile with founders whom we associate with and because of this we keep 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 assist as earlier described. Being an efficient fund supervisor additionally places the fiduciary accountability on you to know when to cease devoting scarce assets to issues that may show too tough to repair and dedicate these assets to higher-performing firms in your portfolio to reduce losses and maximize investor worth.”
The Oui Capital staff
Although financial cycles just like the one the startup world is experiencing are often quick to medium-term, Oyinsan echoes what native buyers have communicated these previous few months: the return of sticking to first rules and backing firms with sturdy fundamentals, unit economics, and disciplined valuations. This occasion has created a chance for buyers, together with Oui Capital, to speculate up the chain, particularly now that it has newly infused capital. In line with Oyinsan, the agency might be trying to cowl the complete spectrum of investments earlier than Collection A, together with bridge rounds, an exercise it would amplify, notably 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-Collection A levels final week.
From this new fund, Oui Capital intends to jot down preliminary checks of as much as $750,000 (a 10x enhance from its ticket measurement when it launched its first fund) with reserves in place for such follow-on investments. “Anticipate us to be main many extra offers throughout the ecosystem and vocalizing agency initiatives — all issues that we’ve been doing quietly up 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 (by way of income and market capitalization), TeamApt is, for now, the breakout success of Oui Capital’s portfolio. The fintech, which in accordance with sources, is available in the market to lift a Collection C spherical subsequent yr, stands as one of many continent’s touted soonicorns. Thus, Eniolorunda changing into a restricted associate on the agency is worthy of admiration as it’s such a uncommon feat in these elements for founders to turn out to be 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 energy 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 a degree the place they need to pay it ahead.”
Oui Capital invested in TeamApt when the fintech firm was beneath 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 method; the agency desires to make novel investments into startups it believes can turn out to be winners of their respective international locations and sectors. Oui Capital highlights Maad (the primary B2B market for fast-moving client 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 a minimum of 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 growing startup and enterprise capital exercise final yr when African tech funding hit report highs in correlation with international numbers.
“Our pan-African technique has made us a fund of selection for international LPs on the lookout for 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 embody Angur Nagpal’s Vibe Capital, D International ventures, Boston-based One Approach Ventures and Floor Squirrel Ventures.