African venture capital is entering a more selective era, but one major fund is betting that technology can still unlock overlooked markets.

Pan-African venture firm Ventures Platform has raised $83 million for its second fund, Fund II, exceeding its target. The fund will invest in early-stage technology startups and expand its operations beyond Nigeria.

Ventures Platform will focus on companies in fintech, healthcare, SaaS, and other technology sectors. Priority will be given to solutions that address critical needs in African markets, improve access to essential services, and build scalable businesses with long-term potential.

Artificial intelligence will be a separate focus of the investment strategy. The firm views AI not merely as an additional product feature, but as a tool for reshaping the cost of services, creating new business models, and developing new market categories.

We are particularly interested in where AI changes the economics of serving African markets. For us, AI is most compelling when it is not simply a feature, but enables an entirely different cost structure, business model, or market.

– Kola Aina

Ventures Platform Fund II: Investments in Kenya, South Africa, and Egypt

Ventures Platform is headquartered in Nigeria. In 2022, the company raised $46 million for Fund I, which primarily backed startups at the pre-seed and seed stages.

Kola Aina noted that the first fund demonstrated the potential to scale an early-stage venture investment strategy in Africa. The results of Fund I provided the foundation for launching the larger Fund II.

The second fund has already financed five companies across three African countries:

Kenya;
South Africa;
Egypt.

Ventures Platform can invest up to $3 million in a single company. The fund’s team plans to deploy the raised capital over three to four years.

The focus will be on technology products that help overcome infrastructure constraints, expand access to critical goods and services, and create new consumption models in African markets.

Why Venture Investors in Africa Have Become More Selective

Fundraising for Fund II took about a year and a half. According to Kola Aina, venture market conditions became significantly tougher during that period than they had been when the first fund was raised.

Limited partners are examining fund performance, portfolio composition, liquidity opportunities, the management team’s discipline, and how the investment strategy differs from competitors in greater detail.

The result has been a much deeper understanding of the importance of capital efficiency, stronger fundamentals, corporate governance, regulatory engagement, and building businesses capable of withstanding different funding cycles. It has become much clearer that simply raising subsequent rounds of capital is not enough to create valuable companies and venture returns.

– Kola Aina

Investments in African Startups

According to TechCrunch, at the time of publication, African startups had raised approximately $930 million across more than 200 deals. By comparison, the previous year saw $1.16 billion in venture funding across 447 deals.

Despite tougher market conditions, around 70% of Fund I investors decided to participate in Fund II as well. The new fund was joined by the European Bank for Reconstruction and Development, Norfund, and Ghana’s Ashesi University Foundation.

The new Ventures Platform fund is expected to strengthen the company’s presence in Africa’s key technology markets and provide funding for startups developing practical solutions for large groups of consumers and businesses.