From the glitz of Hollywood, a venture capital firm is placing a significant bet on the burgeoning tech landscape of Africa. MaC Venture Capital, a relatively young firm founded in 2019 through a merger, has already channeled over $20 million into African startups. Now, armed with a newly raised $150 million fund, the company is signaling an even more aggressive push into the continent, firmly believing that “Africa’s the next major frontier” for innovation and business growth.

Michael Palank, a general partner who joined MaC at its inception, articulated the firm’s conviction, in a recent interview. With a background in venture-backed media and tech companies, Palank emphasizes MaC’s core philosophy of supporting companies at their earliest stages. “We chose seed-stage investing because we thrive on helping people in their early journeys,” he explains, drawing parallels to the diverse experiences of the firm’s founding managing partners — Adrian Fenty (former Mayor of Washington, D.C.), Marlon Nichols (a seasoned consultant), and Charles D. King (founder of media company Macro). This collective experience, Palank suggests, fuels their passion for guiding founders during the crucial initial phases.

MaC’s appetite for risk appears well-suited to the uncertainties of early-stage ventures. Palank acknowledges that seed-stage startups inherently carry the highest risk, but it’s a risk the firm embraces due to the potential for significant upside and transformative impact. While their investment portfolio spans geographies, with a notable presence in California, their focus on Africa reflects a strategic belief in the continent’s untapped potential. “We look for companies that can have a sustained competitive advantage given a specific geography,” Palank notes, underscoring their geographically agnostic approach while highlighting Africa’s unique opportunities.

The firm’s definition of early-stage investment is nuanced. Pre-seed typically involves a nascent idea with a strong team, often pre-product and pre-revenue. Seed stage signifies progress beyond the idea, with some proof of concept or validation. Early-stage, which can encompass seed or Series A/B rounds, marks the point where a product is in the market, demonstrating early product-market fit, a growing team, and initial revenue, with funding aimed at accelerating growth. Palank acknowledges the evolving landscape of early-stage valuations, particularly with the rise of AI, where pre-seed and seed rounds can sometimes reach staggering figures.

Identifying promising early-stage investments is a meticulous process for MaC. They rely on deep sector research and a well-defined thesis in areas they are particularly bullish on, including energy, hardtech, fintech, and aerospace and defense. Palank cites the energy sector as a prime example, highlighting the strain on global energy supplies and the infrastructure demands of AI data centers as significant tailwinds. Their due diligence involves assessing whether a potential investment can genuinely solve a pressing problem within their target sectors and rigorously evaluating the team’s ability to execute their vision.

While Palank refrains from naming specific regretted investments, he admits to learning the crucial lesson of balancing technological promise with the team’s execution capabilities. This emphasis on both vision and operational strength underscores their approach to navigating the inherent risks of early-stage investing.

MaC’s commitment to Africa positions them as a significant player in the continent’s rapidly expanding tech ecosystem. Palank asserts that the firm aims to be recognized as a great investment firm, not just a great Los Angeles firm, and their substantial investment in Africa demonstrates this ambition. He views Africa as “the next major frontier for innovation and business growth,” a sentiment that resonates with the growing global interest in the continent’s dynamic startup scene.

However, data from Launch Base Africa suggests a more nuanced picture of MaC Venture Capital ’s investment activity on the continent. While the firm has indeed invested over $20 million to date, the data indicates a conspicuous absence of new investments in African startups during 2024, coinciding with a generally limited investment activity across all geographies. Their peak investment activity in Africa appears to have been in 2022, with notable investments including Big Cabal Media (a Nigerian media company), Afya Rekod (a Kenyan healthtech platform), and IdentityPass (a Nigerian identity verification service).

Despite the apparent lull in the previous year, MaC’s newly secured $150 million fund and Palank’s enthusiastic pronouncements signal a renewed and potentially intensified focus on the African market. The firm’s early bets on companies like Wonder Dynamics (acquired by Autodesk) and Stoke Space (a promising space technology company) demonstrate their ability to identify and support transformative ventures. Their belief in the foundational role of seed and early-stage firms in the startup ecosystem suggests a long-term commitment to nurturing innovation on the African continent.

As more venture capital flows into Africa, the impact on the continent’s economic development and technological advancement could be significant. MaC Venture Capital ’s increased focus, despite recent data indicating a temporary slowdown, positions them to potentially play a key role in shaping this exciting future. Whether their ambitious $150 million target translates into a sustained surge of investment in African startups remains to be seen, but their conviction in the continent’s potential is a clear indicator of the growing global recognition of Africa’s burgeoning entrepreneurial spirit.