Ventures Platform has closed its second institutional fund at $84 million, giving the African venture capital firm more capital to invest in promising startups and increase the size of its investments across the continent.
The new fund, VP Pan-African Fund II, is expected to have a wider impact on Africa’s startup ecosystem by providing growing businesses with larger amounts of early-stage capital. The fund is 1.8 times the size of Ventures Platform’s first institutional fund, which closed at $46 million in December 2022.
The firm plans to support roughly the same number of companies as it did through its first fund, but with larger cheques and higher ownership in the businesses it backs. It will target entry stakes of between 10% and 12%, with the aim of providing more support as successful companies grow.
Larger investments and stronger support for startups
Ventures Platform now invests across three stages: pre-seed, seed and pre-Series A. Founding partner Kola Aina said the firm expects to write initial cheques of up to $3 million, with an average investment of about $1.5 million. It will also reserve capital to invest more in companies that perform well.
“What we’re looking to do is invest with much deeper conviction, so much larger ticket sizes,” Aina said, explaining that the strategy is designed to give the firm stronger positions in the startups it supports.
The change is based on a key lesson from the firm’s first fund. Aina said ownership matters because the value of a stake can become more expensive as a company grows. “Entry ownership is everything, because the stock only gets pricier,” he said.
The approach is also linked to how African venture investors are increasingly achieving liquidity. Secondary sales, where an early investor sells part of its stake to another investor, have become an important route for Ventures Platform. The firm’s research found that 73% of African venture exits happen through acquisitions, while Aina expects secondary transactions to account for a significant share of future liquidity.
A broader investor base and an Africa-focused strategy
Fund II includes four new institutional investors: the European Bank for Reconstruction and Development, Norfund, Dutch family office Alphatron and the Ashesi University Foundation, alongside new family offices.
They join investors from the fund’s $64 million first close, including Nigeria’s iDICE programme, the International Finance Corporation, Standard Bank, British International Investment, Proparco through Choose Africa, Egypt’s MSMEDA, AfricaGrow and Alder Tree Investment.
The fund has a strong development finance presence, but private capital now represents a larger share than it did in the first fund. Aina said Ventures Platform is willing to work with different types of investors because Africa continues to receive a small share of global venture capital.
“Africa only gets less than 2% of venture capital, and we need a lot more venture capital, not less,” he said.
The firm is also building its strategy around Africa’s currency challenges. It is expanding its geographic reach, including an investor in Abidjan for Francophone West Africa and a team member in Cairo. This gives the portfolio exposure to different currencies and markets.
Ventures Platform also looks for companies capable of growing faster than inflation and currency devaluation, including businesses that generate foreign-exchange revenue or spread their operations across currencies.
“We are assuming that we could have even more devaluation in the future, and we’ve baked that into our investing strategy,” Aina said.
With $84 million now available, Fund II gives Ventures Platform greater capacity to support African startups through their early stages, provide follow-on capital to its strongest performers and contribute to the growth of businesses that can operate and scale across the continent.
