Ventures Platform’s second fund closes at $84 million, almost double its first

Ventures Platform, a prominent African seed-stage venture capital firm, has successfully closed its second institutional fund, valued at $84 million, nearly doubling the size of its first fund. This new fund, known as VP Pan-African Fund II, attracted four additional institutional backers, including the European Bank for Reconstruction and Development, Norfund, Alphatron, and the Ashesi University Foundation.

Joining these new investors are limited partners from the previous $64 million fund, which included Nigeria’s iDICE programme, the International Finance Corporation, Standard Bank, British International Investment, Proparco, Egypt’s MSMEDA, AfricaGrow, and Alder Tree Investment.

With its larger size, Ventures Platform aims to make deeper investments in startups, targeting entry stakes of 10% to 12%. The firm’s founding partner, Kola Aina, explained that the goal is to take a more substantial ownership position, allowing the fund to double down on successful companies. Aina noted that the firm's first cheque could be up to $3 million, with an average size around $1.5 million.

The emphasis on larger checks stems from the firm's belief that entry ownership is crucial, as it significantly impacts returns at exits.

The fund's investor base is primarily composed of development finance institutions and sovereign capital, a mix that Aina argues is essential for driving growth in African startups. He emphasized the importance of a diverse LP pool to raise capital at scale for Africa, countering the notion that the continent is more risky than other markets. Fund II's investment strategy remains focused on pre-seed, seed, and pre-Series A stages, with a maximum first cheque of $3 million and an average of $1.5 million.