Pan-African venture firm Ventures Platform has closed its second fund at $83 million, a near-doubling of its first fund as it executes a geographic and strategic expansion. According to TechCrunch, the firm is now deploying capital from Fund II to startups across Kenya, South Africa, and Egypt, moving beyond its traditional home base in Nigeria.
This move raises a critical question: in a venture climate where limited partners (LPs) are demanding proof, not promises, how does a firm justify expanding its geographic risk?
How Do You Move Beyond Nigeria When Capital Is Scarce?
For Ventures Platform, the answer is rooted in a selective market. Foundning Partner Kola Aina described the 18-month fundraise as taking place in a more "selective" environment than 2022's $46 million Fund I. LPs, Aina said, are asking harder questions about performance, portfolio construction, and differentiation.
“The conversation has moved from ‘Why Africa’ to ‘Why you and how exactly are you going to generate returns,’”
The firm's stated edge is a combination of local market depth and global connectivity. The expansion isn't a shot in the dark. Aina pointed to five companies already funded in the new target markets, with check sizes from the new fund capped at $3 million. The strategy is to deploy capital over the next three to four years into sectors where technology addresses essential needs, including fintech, healthcare, and SaaS.
Their thesis explicitly includes AI, but not as a buzzword. "We’re particularly interested in where AI changes the economics of serving African markets," Aina said, highlighting its potential to reduce service delivery costs and overcome labor shortages. For them, AI must enable "an entirely different cost structure, business model or market."
Why Are LPs Still Writing Checks in This Climate?
The fundraising data points to a barbell effect in African venture capital, with capital concentrating at the top tier and with emerging managers who have proven trust. Ventures Platform sits in the former category. Its ability to secure $83 million, drawing back 70% of Fund I's LPs, signals its institutional credibility.
Backers include:
- The European Bank for Reconstruction and Development
- Norfund (Norway's development finance institution)
- Ghana’s Ashesi University Foundation
Aina notes that the discipline is healthy. Capital is no longer assumed to be unlimited, especially after the venture bust a few years ago burned many LPs.
“The result is a much greater appreciation for capital efficiency, stronger fundamentals, governance, regulatory engagement, and the importance of building businesses that can survive different funding cycles.”
This shift mirrors a global trend where investors are scrutinizing fundamentals over growth-at-all-costs narratives. It echoes challenges seen even in developed markets, where access to traditional growth capital can stall expansion, as we've reported in Static Bank Loans Stall 28% of US Middle Market Growth.
What Does an $83 Million War Chest Actually Buy?
For the African startup ecosystem, this fund represents more than just capital. It's a signal of mature, sustained institutional interest during a period of overall contraction. African startups raised roughly $930 million across 200+ deals this year, down from $1.16 billion across 447 deals last year.
Ventures Platform's expansion provides a template for other Pan-African funds: deep local expertise applied across a wider canvas. The capital will target early-stage rounds in markets "where technology can expand access to essential products and services, address critical infrastructure gaps, and create entirely new categories of consumption."
Key Deployment Facts:
- Check Size: Up to $3 million
- Timeline: Capital to be deployed over 3-4 years
- Stage Focus: Early-stage (pre-seed, seed)
- Geographic Expansion: Active in Kenya, South Africa, Egypt
The firm's success in retaining LPs suggests its focus on fundamentals and capital efficiency aligns with current investor priorities. In a market now demanding proof, their continued backing is a strong vote of confidence.
Will Geographic Diversification Pay Off in a Tough Exit Environment?
The final, unanswered question is about returns. Ventures Platform has the capital and mandate to back companies across Africa's major tech hubs. However, a wider geographic spread introduces complexity in portfolio support and navigating distinct regulatory environments.
Aina believes the current generation of founders and fund managers, having weathered both abundance and scarcity, is better equipped for this reality. The firm's challenge will be to prove that its model of "local depth and global connectivity" can not only pick winners across borders but also guide them to exits in a region still developing its public market and M&A pathways.
The next 12-18 months will be telling. Watch for follow-on rounds in Ventures Platform's new regional bets. Their progress will be the real test of whether a Pan-African strategy, backed by disciplined LP capital, can generate the venture-scale returns the market now demands.
Disclaimer: This XOOMAR analysis is for informational and educational purposes only. It is not financial, investment, legal, tax, or professional advice. It does not provide buy, sell, hold, price-target, portfolio, or personalized recommendations. Verify information independently and consult qualified professionals before making decisions.
The Bottom Line
- It signals continued, albeit more selective, investor confidence in African tech startups despite a tougher funding environment.
- The firm's expansion into Kenya, South Africa, and Egypt diversifies risk and capitalizes on growth outside its Nigerian base, potentially benefiting a wider ecosystem.
- The focus on AI as a tool to reduce costs and unlock new business models highlights a strategic shift towards sustainable, efficiency-driven solutions for African markets.
Originally published on XOOMAR. For more news and analysis, visit XOOMAR.
