Beyond Capital Ventures, a Texas-based venture capital firm known for its strong impact mandate, is gearing up to provide African early and growth-stage startups with fresh capital through its latest fund initiatives. As the firm deepens its presence in Africa and India, it seeks to balance high-impact investments with a profit-sharing model that incentivizes both financial and social returns.
Dual Fund Strategy: Equity and Debt Vehicles
At the core of Beyond Capital’s latest fundraising push are two key vehicles: Beyond Capital Ventures Fund III, an equity fund, and the BCV Debt Opportunities Fund, a working capital provider. These funds aim to support startups that are driving access to essential services in healthcare, financial inclusion, and climate resilience, particularly for the rapidly expanding middle class across emerging markets.
Fund III, with a target of $75 million, focuses on seed to Series A investments, ranging between $500,000 and $2.5 million. The fund’s unique structure includes a profit-sharing mechanism in which a portion of the carried interest is allocated to portfolio companies that meet specific gender and climate impact targets. This model, which the firm describes as “Equitable Venture,” aligns the success of both investors and investees, fostering a long-term partnership rather than a traditional transactional investment relationship.
Eva Yazhari, managing partner at Beyond Capital Ventures, emphasized this alignment: “We want a partnership with our investees where we’re bonded in the success of our fund, particularly when they meet the impact goals we’ve collectively set.”
In addition to equity, BCV’s Debt Opportunities Fund is targeting $8 million to provide portfolio companies with critical working capital and bridge loans. The fund, which has raised $1.86 million to date, serves as a financial lifeline to high-impact startups in Africa and India, helping them navigate cash flow challenges without diluting ownership through additional equity rounds. The debt fund has already made three investments, offering much-needed liquidity to early-growth companies.
African Impact and Portfolio Focus
Beyond Capital Ventures has been increasingly active in Africa, where it sees immense growth potential in sectors like healthcare and renewable energy. A standout investment is Ampersand, a Rwanda-based electric motorbike manufacturer. Ampersand’s electric two-wheelers offer a cleaner alternative to the conventional petrol bikes that dominate the African transport sector, contributing to both climate resilience and economic growth in the region.
Previous investments in Africa include eyecare startup Lapaire and Kasha, a distributor of women’s health and hygiene products, further underscoring Beyond Capital’s focus on addressing essential needs for underserved populations. The firm’s investment thesis is underpinned by the belief that sectors such as healthcare and financial inclusion are not only critical for societal advancement but also represent high-growth opportunities as the African middle class continues to expand.
Aiming for Gender and Climate Impact
Beyond Capital’s commitment to impact goes beyond financial returns. Through its gender and climate targets, the firm actively seeks out businesses that promote diversity in leadership and tackle pressing environmental challenges. This dual focus allows the fund to meet the rising demand for responsible investing, catering to institutional and high-net-worth investors who prioritize impact alongside profit.
By sharing carried interest with founders who meet these targets, Beyond Capital creates additional incentives for companies to integrate impact objectives into their core business strategies. “We believe in a venture model that’s both financially rewarding and impactful for all stakeholders, including the founders who are creating solutions for some of the world’s toughest challenges,” said Yazhari.
Beyond Capital Ventures is making a concerted effort to close the funding gap for African and Indian startups, targeting sectors that are often underserved by traditional venture capital. With 17 recommitments from existing investors and nine new backers, the firm is optimistic about its first close of $7 million for Fund III, expected by August 2024.
As the fundraising progresses, the firm continues to build a diverse portfolio of investments that prioritize impact and growth. With its debt and equity offerings, Beyond Capital Ventures positions itself as a key player in the African startup ecosystem, offering flexible financing solutions tailored to the unique needs of emerging market startups.