Breega, a Paris-based venture capital firm, has witnessed the maturation of Africa’s tech ecosystem over the years. The continent has seen a significant increase in venture capital funding, from less than a billion dollars per year to a record-high $6 billion. Additionally, there has been a rise in high-growth companies, with the number of unicorns increasing from one to seven in just three years.
Now, Breega wants to invest in the potential it sees in Africa with a $75 million fund for early-stage startups. The firm has already secured commitments for around 70% of the capital in the first close. Breega prides itself on being a founders-for-founders fund, providing operational expertise to its portfolio companies. The firm’s success in Europe has driven its decision to launch a fund for African startups.
Breega’s Africa Seed I fund is the firm’s sixth fund in nine years and its first outside of Europe. It has opened two new offices in Lagos and Cape Town to strengthen its presence in Africa’s tech ecosystem. The firm plans to invest between $100,000 and $2 million in startups across the Big Four African markets (Nigeria, Egypt, South Africa, and Kenya) as well as Francophone African markets.
Melvyn Lubega and Tosin Faniro-Dada are leading Breega’s Africa fund, bringing decades of entrepreneurial and operational experience to the table. The fund has received backing from institutions such as Bpifrance and the Dutch entrepreneurial development bank, FMO. Breega aims to make at least 40 investments from this first fund and has already backed nine startups.
In an interview, Breega’s partners discussed the firm’s value proposition for founders. They emphasized that all partners and investment team members at Breega are former founders and operators, providing firsthand experience and acting as sparring partners for entrepreneurs. The firm also has a dedicated team to support its portfolio companies across various areas.
Breega is keen on investing in sectors that can have a transformative impact on addressing challenges in Africa, such as fintech, healthtech, proptech, logistics, and edtech. The firm’s approach is to back solutions tailored to meet local needs and challenges specific to Africa’s diverse markets.
While Breega acknowledges the potential of the largest markets, it also recognizes the value in investing in untapped markets. The firm believes that there are valuable opportunities in regions that don’t receive much venture capital funding. By taking a broad approach and investing in diverse markets, Breega aims to catalyze ecosystems and create value.
The African VC scene is currently experiencing some challenges, with many investors focusing on their current portfolio companies and deploying less capital to new businesses. However, Breega believes that familiar names are still active in investing across various stages and markets, albeit with more caution in their investment decisions.
Overall, Breega’s $75 million fund for early-stage startups in Africa reflects the firm’s belief in the continent’s potential. By leveraging its operational expertise and local market knowledge, Breega aims to support and nurture the growth of innovative startups in Africa’s tech ecosystem.
