Venture capital activity in Africa has demonstrated remarkable resilience over the past six months, with major firms on the continent successfully closing their funds despite the ongoing funding winter. In the latest development, TLcom Capital, an African VC firm with offices in Lagos and Nairobi and a focus on early-stage startups, has concluded fundraising for its second fund, TIDE Africa Fund II, raising a total of $154 million.
The oversubscribed fund, initially targeted to close at $150 million, attracted participation from over 20 limited partners, including notable investors such as the European Investment Bank (EIB), Visa Foundation, Bertelsmann, and AfricaGrow, a joint venture between Allianz and DEG Impact. The final close positions TLcom Capital as Africa’s largest investor across seed and Series A stages, according to the firm.
The successful final close comes two years and a few months after TLcom announced the first close of the second fund at $70 million, matching the size of its first fund, TIDE Africa Fund I. While the broader slowdown affecting venture capital and startups globally contributed to the prolonged fundraising period, TLcom can count a few positives, according to Maurizio Caio, the firm’s managing partner.
Notably, TLcom closed the second fund in a shorter time-frame than its preceding fund despite being twice its size. Caio attributed this to an improved understanding and acceptance of venture capital in Africa among limited partners as a legitimate asset class. Additionally, a portfolio of companies that exemplified the firm’s investment strategy played a pivotal role in garnering investor confidence and support.
Unlike many VC firms that progress from backing startups in pre-seed and seed stages to later-stage investments with subsequent funds, Caio said TLcom maintains a consistent strategy. The firm, which focuses on traditional sectors like fintech, mobility, agriculture, healthcare, education, and commerce, prioritizes early-stage opportunities, particularly at the seed and Series A stages, while also considering opportunistic deals at growth and later stages.
For example, the investor backed 10 out of the 11 companies from its first fund at the seed or Series A stages and has deployed capital in follow-on rounds at later stages across both funds, such as a Series C investment in Andela, a unicorn provider of global job placement for software developers, and partaking in a Series B extension round in FairMoney, a Nigerian digital bank.
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