Africa-focused venture capital (VC) firm Atlantica Ventures is raising a US$50 million fund that will invest in tech and tech-enabled businesses from seed stage onwards.
Founded in 2019 by Aniko Szigetvari and Ik Kanu, who have previously worked for the likes of IFC, Helios and Convergence and have extensive angel investing experience, Atlantica Ventures counts among its portfolio the likes of Paystack, recently acquired by Stripe, and Sendy.
Its new US$50 million pan-African VC fund, through which it has already invested in Nigerian startups Curacel and OnePipe, is financed by development financial institutions, a US fund of funds, and various high net worth individuals, and will invest in tech and tech-enabled businesses at seed stage.
Primary target markets are Nigeria, Kenya, South Africa, Ghana, Ivory Coast and Tanzania, which between them represent 60 per cent of Africa’s GDP, while it is focused on fintech, logistics, agri-tech, digital security, IoT, and B2B marketplaces.
“These are significant contributors to the target markets’ GDPs and are interlinked, allowing for value chain/platform investing,” Kanu said. “These sectors also exhibit some recession fluidity, and are aligned with the future-of-work. COVID-19 has accelerated the adoption of technology across our target markets, and these sectors have been pivotal to the economies.”
Atlantica Ventures encourages portfolio companies to work with each other to maximise value. Its African and global networks also facilitate these companies to scale faster to other markets and regions.
“We invest from seed to Series B rounds with a data-driven approach for investment opportunity evaluation and portfolio management. These startups are solving essential local problems and have demonstrated product market fit with the ability to scale globally,” Kanu told Disrupt Africa.
“Atlantica Ventures becomes a mentor and partner to the startup, not just an investor. The partners have deep experience in investing and supporting companies from early stage to growth, and also turnarounds. The support is not just from an investment standpoint, but also hands-on operational.”
Kanu said African entrepreneurs face “access” challenges – access to capital, access to markets, access to strategic partners, and access to knowledge – with access to capital and knowledge being at the forefront of these challenges.
“Atlantica Ventures partners have relationships with global investors, sector players in other markets (small to large), and development financial institutions to help solve these access challenges. Being able to provide knowledge access to advisors and comparable companies in non-competing markets helps entrepreneurs build for global scale and avoid typical pitfalls that have stumped other founders,” he said.
Often, the problems African entrepreneurs solve are present in other emerging, and even developed, markets.
“To compete and penetrate outside the core market, the product-market-channel fit needs to be evaluated and complimented as necessary. For example, the process flows in a particular market may need a new product feature, a new partnership will need to be established, and the route-to-market via different channels will need to be built,” said Kanu.
“The entrepreneur has to evaluate the company’s internal capabilities, determine what to enhance, and determine the right time to expand. We have seen and helped companies, such as Migo Money, in our portfolio expand to other countries and regions, and that is a key part of our growth strategy for the startups.”