Future Africa, a venture firm co-founded by Iyinoluwa Aboyeji and Nadayar Enegesi, said on Monday it has invested $3 million in 13 African startups since January 2021.
It brings the total number of startups Future Africa has backed to 47, a significant milestone for a venture fund that only began its journey in January 2020.
Future Africa plans to do about 87 more venture deals before the end of the year. Also important to note is that the $3 million is double the size of money the firm deployed in the whole of 2020.
The company claims it removes the barriers of investing in startups by giving investors access to vetted and verified startups transforming Africa.
“It is an exclusive membership club that gives you the opportunity to invest alongside the Future Africa team on a deal-by-deal basis through investment syndicates,” the company said in a post. The startups it invests in are very diverse and are not restricted to any part of Africa.
“We’ve made more pan-African investments and our portfolio now includes startups in Nigeria, Ghana, Kenya, Tanzania and South Africa,” Future Africa said in its $3 million announcement.
A look at the list of the 13 deals shows three interesting insights on investors’ funding direction.
Investors prefer early-stage startups with clear-cut expansion plans
It is one theme that reflected in all the 13 startups. Termii the startup which recently secured $1.4 million co-led by Future Africa (It can invest up to $500,000), is based in Lagos but has ambitions for helping African businesses send, analyse and optimise digital communications across e-mail, SMS, voice, and WhatsApp.
Future Africa also participated in a $1.8 million funding raise for Kenya-based Lami Insurance which helps African insurers use artificial intelligence to provide better services to the insured and expand faster to the uninsured.
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Others include “A startup building programmable cards. Its API helps businesses create flexible virtual and physical cards for multiple purposes.
A startup in the retail space, providing credit-backed goods for retailers in Kenya, Ghana, Tanzania and Nigeria.”
There is also a digital bank enabling transactions for financial organisations operating in the UK-Africa corridor. The bank plans to first solve for the UK-Africa corridor and expand into the rest of Europe.
Investors are paying more attention to women-led startups
This is already long over as several reports have shown that women-led startups are perpetually sidelined in most investment calls. But Future Africa says it has achieved its $1 million pledge to strictly women-led startups in the past five months. The pledge was made in January 2021.
“Our normal system still throws up heavily biased outcomes. So we are specifically committing up to 1m dollars in funding female founders.,” Iyinoluwa Aboyeji, CEO of Future Africa Fund said in an interview in January. “We believe we’ll make money if we can find the best ones. And you will see us announce some funding into a few really bold female-led startups.”
One of the recipients of the funding is Lami, a female-founded-and-led insurtech company democratising insurance products and services.
Investors are more eager to diversify
Funding in Africa, whether led by local or foreign investors is dominated by fintech firms. The 13 startups that Future Africa invested come from different sectors with diverse risks.
Although fintech companies still dominate, it is interestingly much lower from what used to obtain where 70-80 percent funding goes to the segment.
About four of the startups are fintech companies. Out of the four, two are focused on diaspora remittances, one is in cryptocurrencies and the last startup provides value added services to fintech companies.
“We’re blown away by how much capital we can raise for mission-driven founders in a matter of hours. In March, we raised $500,000 within an hour for a startup we presented to the collective,” Future Africa said.
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