TLcom, an Africa-focused venture capital firm, has announced a first close of $70 million for its $150 million (Ksh17 billion)Africa focused tech fund, firmly positioning the investor to become the largest independent venture capital firm fully dedicated to the continent.
With a first close in line with the total size of its TIDE Africa Fund closed in 2020, TLcom’s second fund sees participation from Allianz, the world’s largest insurance company, through AfricaGrow, its joint venture with DEG Impact (German Investment Corporation), as well as a host of new and returning investors including Bertelsmann, King Philanthropies, the TLcom team and FBNQuest from the private sector, and major DFIs such as CDC Group (the UK’s development finance institution), IFC, Proparco and Swedfund. A second close of the fund is expected later in 2022.
With its new fund, TLcom will expand its existing focus on fast-growth, tech-enabled African startups to Egypt, as well as strengthen its long-standing presence across East and West Africa. With ticket sizes ranging from $500,000 – $15 million, TLcom expects to add an additional 20 early-stage startups to its portfolio with an emphasis on Seed and Series A stages and will target entrepreneurs tackling some of the continent’s most complex challenges in sectors including fintech, mobility, agriculture, healthcare, education and ecommerce.
“Since the closing of our previous fund, African tech has secured more high-value financing rounds, exits and M&As than ever before and this is only just the beginning. It is becoming increasingly evident that our sector has broken into a new era of maturity driven by very strong business fundamentals that African founders are demonstrating not only in the fintech space, but across a huge number of the continent’s largely underserved markets,” said Maurizio Caio, Nairobi-based Founder and Managing Partner at TLcom.
“As we partner with some of the world’s leading global investors for our new fund, this is not only an endorsement of the massive value generation upside on the continent, but also of our proven track record in identifying and supporting entrepreneurs successfully winning and redefining Africa’s key verticals. In order to contribute to unlocking the next phase of Africa’s huge economic upside, we’ll be mobilizing our new fund to strengthen our partnership with African founders, with a special emphasis on female entrepreneurs, as well as our role as the leading local partner of choice for global VCs increasingly looking at Africa.”
The entrepreneurs supported by the TIDE Africa Fund have amassed huge traction in recent years with total revenues across its portfolio growing three times since investment, over 2,300 jobs created and significant up-rounds secured with participation from leading global investors including Softbank, Owl Ventures and Index Ventures.
To-date, TLcom’s portfolio companies have raised more than half a billion dollars of capital in addition to funding issued by the TIDE Africa Fund and on average, new investments secured from these startups were priced at five times the valuation of the initial investment received from TLcom. In 2021, the investor also announced the first unicorn in its portfolio following Andela’s $200 million Series E funding at a valuation of $1.5 billion.
“We are excited to expand our partnership with TLcom. The fund’s focus on business fundamentals coupled with deep understanding of local context has been instrumental in identifying market shaping businesses and innovative entrepreneurs in Africa. We are confident that our continued relationship will further amplify TLcom’s ambitions to accelerate impact to consumers and businesses across Africa’s diverse markets,” said Abhinav Sinha, Director and Head of Technology and Telecom at CDC.
Launched in 1999, TLcom currently has in excess of $350 million worth of funds under management across primary and secondary funds and boasts one of the leading portfolios in African tech featuring 12 startups including Andela, Ajua, Autochek, Ilara Health, Kobo360, Okra, Pula, Seamless HR, Shara, Terragon Group, Twiga Foods and uLesson.
“One thing is clear to those who are close to the African VC market: it will grow. We at AfricaGrow believe much more is possible in terms of capital influx into the continent especially in the VC space. There is considerable upside for everyone if investment activities accelerate even more: African businesses can boost productivity, gain in terms of competitiveness and technological edge and tens of millions more Africans could gain stable employment while generating returns for investors,” says Martin Ewald, Lead Portfolio Manager Impact Investments, AfricaGrow/Allianz Global Investors.
With its offices based in Kenya, Nigeria as well as the UK, TLcom invests across all stages of the venture capital cycle and manages a broad portfolio of tech-enabled startups addressing a range of sectors including agriculture, education, data analytics and logistics.
“FBNQuest Funds is pleased to have participated in the first close of TLcom’s second edition pan-African Tech Fund (TIDE Africa Fund II). This follows our first close commitment to the manager’s maiden fund (TIDE Africa Fund I). Our decision to back TLcom on its second fund was based on the fund manager’s demonstrated track record of investing in high growth tech companies with strong business fundamentals and implementing value creation strategies that improve the operations and profitability of these companies,” said Ijeoma Agboti, Managing Director at FBNQuest Funds.