One of Africa’s most established venture capital firms, LoftyInc Capital, known for its early backing of now-continental players like fintech giant Flutterwave and education platform Andela, has secured a $43m first close for its third fund, aiming to capitalise on the next phase of African tech growth.
The Lagos-based firm’s new vehicle, LoftyInc Alpha, arrives at a pivotal moment for the continent’s burgeoning start-up scene. While global venture funding has cooled, recent data from industry analysts Partech indicate a comparatively modest dip in deal volume and value across Africa in the past year. This resilience underlines the increasing maturity and underlying potential of the region’s tech ecosystem, but also highlights evolving challenges.
Crucially, LoftyInc is strategically positioning its latest fund to address a critical bottleneck: the so-called ‘Series A crunch’. While pre-seed and seed stage funding remains relatively buoyant, driven by a proliferation of angel investors and micro-funds, the data reveals a steeper decline in average ticket sizes at Series A and beyond. This funding gap at the crucial late-seed and Series A stages threatens to stifle the growth of promising ventures as they attempt to scale.
“At pre-seed and seed, there’s a lot of hype, but by Series A, the questions investors ask are very different,” explains Idris Ayo Bello, founder and managing partner of LoftyInc. Bello emphasises the firm’s renewed focus: “Our goal is to come in at seed, but our mandate is to help you get to Series A. We want to be the firm that gets startups over that hump.”
LoftyInc Alpha marks a strategic evolution for the firm, which has spent over a decade primarily focused on pre-seed and seed investments. Having witnessed the rapid transformation of the African tech landscape firsthand — from the initial fintech boom and the emergence of a deep tech talent pool, to the unicorn frenzy of 2021 and the subsequent market correction — LoftyInc is leveraging its experience to navigate the next chapter.
The firm’s journey began in 2012 with an angel network, which organically evolved into a community of over 250 investors across Africa and its diaspora. This grassroots movement laid the foundation for LoftyInc’s first institutional fund in 2017, a modest $1.1m vehicle exclusively backed by high-net-worth individuals (HNIs) and focused solely on Nigeria. Impressively, this initial fund delivered a 5.7x cash return to investors, fuelled by early bets on Flutterwave and Reliance Health, demonstrating the potential of the nascent African tech market.
Building on this success, LoftyInc launched its second fund in 2021, initially targeting $10m but ultimately closing at $14.2m. This fund broadened its geographical scope beyond Nigeria, embracing a pan-African approach encompassing Egypt, South Africa, and Francophone Africa — markets where LoftyInc intends to remain active. Notably, this fund attracted investment from Meta, marking the tech giant’s first foray into African venture capital.
The new $43m LoftyInc Alpha fund signifies a further step-up in scale and ambition. It will target late-seed and Series A stage companies across Nigeria, Egypt, Kenya, and Francophone Africa, seeking to bridge the critical funding gap hindering the progression of African start-ups. The first close boasts a diverse and strategically valuable limited partner (LP) base, including sovereign wealth funds from the Middle East and Africa such as Egypt’s MSMEDA and Tunisia’s Anava Fund of Funds. Development finance institutions (DFIs) including FMO, Proparco (FISEA), AfricaGrow, IFC, and First Close Partners have also committed capital, alongside African HNIs and European family offices, signaling strong institutional confidence in LoftyInc’s strategy and the wider African tech opportunity.
This blend of LPs provides not only capital but also invaluable networks and expertise, crucial for navigating the diverse and often complex African markets. LoftyInc emphasises its commitment to providing more than just funding, leveraging its operational expertise and established networks to offer portfolio companies market access, business development support, and crucial investor matchmaking — particularly vital for securing follow-on Series A rounds.
To bolster its expanded geographical focus and evolved strategy, LoftyInc has strengthened its leadership team with the addition of Mariam Kamel and Kevin Simmons as general partners. Bringing experience in investment banking, angel investing, and operational VC across the Middle East and Africa, they will deepen the firm’s regional expertise, particularly in East, North, and Francophone Africa, where at least 30% of the new fund will be deployed.
LoftyInc Alpha will focus on sectors driving Africa’s “everyday economy”, with a significant emphasis on financial services, which continues to dominate African tech investment. Other key sectors include logistics and transport, healthtech, retail, climate-focused solutions, and deep tech and AI applications that can enable growth across these verticals. The firm’s existing portfolio includes notable names like Moove, a vehicle financing platform backed by Uber, Egyptian brokerage app Thndr, and B2B e-commerce platform OmniRetail, providing a strong foundation for future investments.
With a seasoned team, a clearly defined strategy targeting a critical market gap, and a robust LP base, LoftyInc Capital’s latest fund is poised to play a significant role in shaping the next wave of African tech success stories. As Bello concludes, “We want to be the firm that gets startups over that hump,” a sentiment that resonates deeply within a maturing African tech ecosystem striving for sustainable growth and global competitiveness.