Verod-Kepple Africa Ventures, a pan-African venture capital firm, has recently closed a $60 million fund aimed at bolstering early and growth-stage startups across the continent. The funding round saw participation from existing Japanese investors such as SBI Holdings and Toyota Tsusho Corporation, alongside newcomers including Nigerian firm SCM Capital and other Japanese institutions like Taiyo Holdings, Sumitomo Mitsui Trust Bank, Japan International Corporation Agency, and C2C Global Education Japan.
The primary objective of the fund is to support African startups at Series A and Series B stages, filling a critical gap in the investment landscape highlighted by a decline in growth-stage investments in 2023 and early 2024. While pre-seed and seed funding have seen increases, there remains a shortage of capital at the growth stage necessary for companies to scale, exit, or establish sustainable profitability.
This shortfall is partly attributed to a reliance on foreign investors for capital infusion, underscoring the importance of greater local investment in fostering growth.
VKAV’s investment strategy centers around three key themes: companies advancing digital infrastructure across sectors, those tackling inefficiencies (primarily in B2B or B2C spaces), and market creators driving economic opportunities based on shifting African economic and demographic dynamics.
The venture capital firm typically invests between $1 million and $3 million per project, with a capacity for follow-on investments. To date, VKAV has deployed $17.5 million across 12 companies in Nigeria, Egypt, Kenya, Morocco, Ivory Coast, and South Africa. These investments span a diverse range of sectors including fintech, mobility, e-commerce, and healthcare, with notable examples including Moove Africa and Koko Networks.
With its latest fundraise, VKAV aims to extend its support beyond established African tech hubs, exploring innovation opportunities in countries such as Angola, Zambia, the Democratic Republic of Congo, and Tunisia. This move signifies a strategic expansion into underserved markets and underscores VKAV’s commitment to a pan-African investment approach.
CEO and Managing Partner of VKAV, Obi Okolloh, emphasized the firm’s interest in startups addressing shifts in consumer trends and emerging sectors. While VKAV remains sector-agnostic, it is particularly attentive to vertical ERP startups, embedded financial services providers, and players in the future of work space. Additionally, the firm is increasingly leveraging AI to anticipate how technological shifts will impact business production and distribution.
Okolloh highlighted the importance of diversity in VKAV’s portfolio, not only in terms of gender and founders but also across sectors and markets. The fund’s collaboration with Japanese institutional investors reflects a growing trend of international partnerships seeking to diversify investment risks in the African tech ecosystem.
Looking ahead, VKAV plans to further explore diverse ecosystems while maintaining its pan-African and sector-agnostic approach. Okolloh expressed enthusiasm for learning and collaborating with partners from different parts of the world, ultimately aiming to empower exceptional founders to thrive in the African startup landscape.
The Verod-Kepple Africa Ventures fund’s expansion into new markets signals a promising trajectory for African startups and underscores the continent’s growing appeal to global investors seeking high-growth opportunities.
