North African venture capital firms are expanding their horizons, with CDG Invest and MNF Ventures among the key backers of French proptech startup Upfund ’s €1.3 million ($1.2 million) funding round. The investment underscores a growing trend of African investors pursuing opportunities beyond the continent to diversify portfolios and mitigate risks in their home markets.
Founded by Mehdi Bakkali and Bereme Lardjane, Upfund applies artificial intelligence (AI) and data analytics to the global commercial real estate market, valued at $7.2 trillion. Its flagship GeoAI platform leverages geospatial data to offer real-time insights to stakeholders, including real estate agents, investment funds, and retail chains.
“AI without data is meaningless,” remarked Bakkali, Upfund’s CEO, emphasizing the critical role of robust data structuring in driving AI innovation. Lardjane, the COO, highlighted the company’s commitment to transparency, stating, “The real estate market should be accessible and clear. Data is key to building trust.”
The capital will allow Upfund to strengthen its R&D capabilities, enhance its GeoAI platform with predictive tools, and expand its commercialization efforts.
North African VCs Increasingly Looking Outward
This investment reflects a broader recalibration by North African VCs, who are increasingly turning to overseas markets to hedge against challenges in local ecosystems. CDG Invest, the investment arm of Morocco’s Caisse de Dépôt et de Gestion, and MNF Ventures are part of a wave of African investors adopting geographical diversification strategies.
A recent report by Launch Base Africa revealed that 35.2% of Africa’s top venture capital investors are now backing startups outside the continent. This shift comes in response to a series of high-profile startup failures in Africa, which have raised concerns about long-term returns.
Morocco’s Maroc Numeric Fund II (MNF II), managed by MITC Capital, exemplifies this evolution. Initially focused on supporting local startups, MNF II now targets Moroccan-founded companies abroad, provided they establish value-generating subsidiaries in Morocco. The strategy, approved in early 2023, aligns with broader efforts to support the Moroccan diaspora while creating synergies between local and global markets.
However, the fund’s journey has not been without challenges. Criticism followed the collapse of Yallah Xash, a fintech startup backed by MNF II, which targeted remittance services for Moroccans in North America. This setback has reinforced the need for cautious, diversified investment strategies.
CDG Invest’s involvement in Upfund follows its recent participation in a $2.4 million seed round for Amsterdam-based hospitality tech startup Userguest, which also has Moroccan roots. These moves highlight an emerging preference among North African investors to back startups with a global reach while maintaining ties to African markets.
The recent exit of CDG Invest from Guichet.com, Morocco’s leading digital ticketing platform, further demonstrates this trend. The company’s pivot to regional expansion mirrors the strategic shift among its investors.
This overseas focus signals both opportunities and challenges for African startups. While it reflects the maturity of African VCs, it also highlights the difficulties startups face in securing local funding amid heightened scrutiny of investment performance.
As North African investors like CDG Invest and MNF Ventures continue their global foray, the dynamics of African venture capital are poised for significant transformation, with the continent’s role as both a hub and exporter of entrepreneurial talent increasingly in the spotlight.