Oui Capital, an early stage African venture capital firm, reaches first closing of its second $30 million fund – TechCrunch

Oy CapitalThe Africa-focused venture capital firm based in Lagos and Massachusetts today announced that it has completed the first closing of its second fund, Oui Capital Mentors Fund II, as it seeks to strengthen its presence on the continent.

The company was founded in 2019 by Olu Owensan And the Francesco AndreoliShe launched her first $5 million fund. Since then, Oui Capital has made 18 investments in technology sectors spanning different industries, such as fintech, logistics, mobility, e-commerce, healthcare, and enterprise software. Some names include TeamAnd the MVXAkiba Digital doublendovo , contagious , integra , Avluence And Pharmacy Mart.

Oui Capital has made eight investments in the past year and this second fund indicates venture capital’s intent to keep pace with this pace. The $30 million fund, just like the first, will support sub-Saharan startups in their pre-seed and seed phases. So far, the company has reached its first closing of just over $11 million and expects to complete the final closing by the fourth quarter of 2022.

Managing Partner Oyinsan, in an interview with TechCrunch, said that Oui Capital’s first fund had strong early returns, with a MOIC (multiplier on invested capital) over 7x. He said that one of the reasons for the company’s success in achieving this lies in “sparks” Which determines which startup to invest in or not: the team, the market, the knowledge of the customer and technology, and the enthusiasm of the customers.

But even though companies follow a guide (like Oui Capital and the investment strategies mentioned above), not all trades yield great results. Oui Capital offers more comprehensive support to some of these startups by increasing partnerships and sales, facilitating recruitment and providing bridge investments. Regarding the additional capital, the managing partner said that Oui Capital is proactively making such investments as part of the company’s ongoing portfolio monitoring. As it stands, Oui Capital has made follow-up investments in about 20% of its portfolio companies.

“We go the extra mile with the founders we partner with which is why we maintain a relatively smaller portfolio compared to many seed funds. However, there is a crucial difference between the responsibilities of venture capital as an investor and as a fund manager,” said the managing partner.

“Being an investor generates a kind of intense optimism and support as described earlier. Being an effective fund manager also puts the fiduciary responsibility on you to know when to stop allocating scarce resources to problems that may be very difficult to fix and allocate these resources to the top performing companies in your portfolio to reduce losses and increase the value of the investor.

Oui Capital . team

Oui Capital team. Image credits: Oy Capital

Although economic cycles like those experienced by the start-up world are usually short to mid-term, Owensan echoes what local investors have been conveying in the past few months: a return to first principles and support for companies with strong fundamentals, the economics of unity, and the discipline of valuation. . This event created an opportunity for investors, including Oui Capital, to invest in the chain, especially now that it has recently injected capital.

According to Oyinsan, the company will look to cover a full range of pre-Series A investments, including bridge rounds, an activity it will amplify, particularly during the current venture capital crisis. In related news, Zedcrest Capital, another VC firm, Launched A $10 million “emergency fund” to rescue pre-Series A startups last week.

From this new fund, Oui Capital intends to write initial checks of up to $750,000 (a 10-fold increase over the ticket size of its first fund) with reserves for such subsequent investments. “We expect us to drive many deals across the ecosystem and roaring company initiatives — all things that we’ve been quietly doing for the past four years, but are now looking to double those deals with the new fund,” added Oyinsan.

Oui Capital’s second fund welcomed a mix of individual and venture capital investors as limited partners. Individual investors such as Brad Field, Seth Levine and Ryan McIntyre (Foundry Group Partners), Gbenga Oyebode, Tokunboh Ishmael of Alitheia Capital, Idris Alubankudi, and TeamApt CEO Tosin Eniolorunda participated.

As one of the largest fintech companies in Africa (in terms of revenue and market capitalization), TeamApt is, at the moment, the huge success of the Oui Capital portfolio. Fintech, which, according to sources, is in the market to raise the Series C round next year, stands as one of the highly lauded centuries on the continent soon. Thus, Eniolorunda becoming a limited partner in the company is admirable as it is a rare feat in these parts for founders to become LPs in the funds that support their startups. Another example is Paystack CEO Shola Akinlade and early African fund, Ventures Platform.

“It’s a great feedback loop for us as a venture capital firm and speaks to the strength of our working relationship with TeamApt in the years prior to our investment in the company,” Peter Oriaifo, director of Oui Capital, told TechCrunch regarding the participation of Eniolorunda LP. “The founder-investor relationship is a testament to our work to support the founder in the founding stage and to see the company succeed to the point where they want to push it forward.”

Oui Capital invested in TeamApt when the fintech company was under the radar and before it caught the attention of other investors. Its success is one of the inspirations behind Oui Capital’s pan-African approach. Owensan said the company is keen to make new investments in startups that it believes can become winners in its own countries and sectors. Oui Capital highlights Maad (the first B2B market for FMCG in Senegal) and Pharmacy Marts (the B2B market for pharmacies in Egypt) as examples.

As a result, African countries in which Oui Capital has made at least one investment include Nigeria, Kenya, Senegal, Egypt and South Africa. The company plans to make more investments in North Africa and Francophone Africa, regions that saw an increase in start-up activity and venture capital last year when African technology financing hits record highs Correlation with global figures.

“Our African strategy has made us a preferred fund for global professional growers who are looking for exposure to Africa’s broader opportunities without having to go into weeds in order to understand different regions separately,” Oyinsan stated. Global investment capitals participating in this second fund include Angur Nagpal Vibe Capital, D Global ventures, Boston-based One Way Ventures and Ground Squirrel Ventures.