TLcom Capital Plans to invest $150 million in 20 African firms with its second fund. TLcom Capital, an Africa-focused firm capital agency known to have placed bets on Andela and Twiga will be elevating $150 million for its second fund aimed at making early and late-stage investments.
The firm has gotten to the primary shut of $70 million, in line with news shared with TechCrunch. It is almost equal to what TLcom Capital raised in the TIDE Africa Fund, its first-ever fund that achieved its first shut in 2017 and maximum shut in February 2020.
Managing partner, Maurizio Caio told TechCrunch during an interview that the second fund should be anticipated to achieve a second shut later this year. It should represent the biggest fundraising but for the two-decade-old agency which has $350 million AUM in the whole of Africa and Europe and workplaces in Lagos, London and Nairobi. In addition, it will also place the investor to change into one of the various largest unbiased VC companies completely devoted to the continent.
TechCrunch reported TLcom Capital’s $71 million TIDE Africa Fund in 2020, and the way the agency proposes to spend money on 12 African startups from seed to Series B levels.
The firm has however managed to invest in up to 11 startups. These include Kobo360, Okra, Pula, Ilara Health, Twiga, Autochek, Andela, Ajua, Terragon Group, and uLesson.
Regardless, VCs take up to five years before they can deploy capital and another five years to make follow-on rounds, and at the end of it all, exit their portfolio firms through acquisition or IPO. Although, in TLcom Capital’s case, it took three and a half years to deploy its capital, from late 2017 to mid-2021.
Maurizio said, “The precise reason we stopped investing is that we have been attempting to grasp how a lot of capital we would have liked to assist these firms going ahead in full-on rounds”.
“Hence, we have determined that we didn’t need to spend money on one other firm, simply because we wished to achieve a dozen firms without having sufficient capital for follow-on rounds”.
The common funding per startup for TLcom Capital is $6 million, nevertheless, it didn’t make investments exactly that quantity in a contemporary or follow-on spherical in any of its portfolio firms. The firm’s first African check was in Andela (40 million Series C), this was way before its first fund that was closed in 2020, it is also the latest stage that TLcom Capital invested. Another one is Twiga’s Series B funding of $20 million in 2019.
TLcom Capital invested in seed and Series A stages for the other nine investments. The company had to invest earlier in some situations, something unusual for large funds in Africa. For example, it invested in Shara and Okra when both firms had nothing other than prototypes and led Autochek’s pre-seed round. This stresses TLcom’s breadth in being the go-to investor for high-growth companies thinking of raising their premier institutional check, according to Maurizio.
TLcom’s participation in leading smaller investments shows the rising intensity with which investors battle these days. From local investors like LoftyInc and Ventures Platform, who have sizable funds to invest quite early, to global investors like Tiger Global and Target Global making inroads from preseed to Series C, this has made the competition within Africa’s venture capital market heat up.
TLcom Capital, whose team includes Maurizio Caio, Senior partner –Omobola Johnson, partners- Ido Sum and Andreata Muforo, says it wants an addition of extra 20 early-stage startups to its portfolio. These companies’ ticket sizes will range between $500,000-$15 million.
Over the years, TLcom-backed companies have increased their revenues by times three since they received money from the firm. Global investors like SoftBank, Index Ventures and Owl Ventures have as well led follow-on rounds in the firm’s portfolio of companies.
African startups raised over $4 billion in the year 2021, this is double of when TLcom closed its first fund. Thinking about this increased activity Caio implores startup founders to make use of the new influx of capital coming into the continent and achieve maximum scale.
“The big picture is that we are still very early in African VC despite raising about $5 billion. This is the message to the entrepreneurs; Think big, don’t try to second-guess; focus on the magnitude of the opportunity, because if it is compelling, you will find capital to support it”, Caio said.
“Do not be bothered about dilution, worry about how much money you need to build a very large company in a large market. Let us take advantage collectively of more capital coming into the tech space”, he concluded.
TLcom Capital Targets $150M Second Funding to Invest in 20 African Startups
