TLcom Capital, an African VC firm, has successfully closed its second fund, TIDE Africa Fund II, at $154 million, making it the largest investor in seed and Series A startups in Africa. This achievement comes despite the ongoing funding winter and the broader slowdown affecting venture capital globally.
The oversubscribed fund attracted participation from over 20 limited partners, including notable investors such as the European Investment Bank (EIB), Visa Foundation, Bertelsmann, and AfricaGrow. This successful fundraising demonstrates growing recognition and acceptance of venture capital as a legitimate asset class in Africa.
TLcom Capital’s ability to close the second fund in a shorter timeframe than its preceding fund is attributed to improved understanding and acceptance of venture capital in Africa among limited partners. The firm’s investment strategy and portfolio of companies also played a crucial role in garnering investor confidence and support.
Unlike many VC firms that shift their focus to later-stage investments with subsequent funds, TLcom Capital maintains a consistent strategy of prioritizing early-stage opportunities, particularly at the seed and Series A stages. However, the firm also considers opportune deals at growth and later stages. This approach allows TLcom Capital to build a portfolio of companies that have the potential to generate significant returns.
To mitigate risks, TLcom Capital backs repeat founders who have gained valuable insights from past ventures. By investing earlier in deals at the pre-seed stage, the firm creates a pipeline for its primary strategy at seed and Series A. TLcom Capital also demonstrates its commitment to gender balance by dedicating a portion of its fund to co-investing in female-led startups.
TLcom Capital focuses on traditional sectors such as fintech, mobility, agriculture, healthcare, education, and commerce. The firm has already made initial investments ranging from $1 million to $3 million in six companies from its new fund. These investments include SeamlessHR, FairMoney, Zone, Vendease, ILLA, and Littlefish, marking the firm’s expansion into Egypt and South Africa.
While TLcom Capital and other notable venture capital firms have raised significant funds to back African startups, attention will soon shift to the exit opportunities and tangible returns they deliver. These outcomes are crucial for driving the overall growth of the African tech ecosystem.
According to TLcom Capital’s managing partner, Maurizio Caio, Africa’s tech ecosystem should not only focus on the amount of money going in but also on generating returns. The goal is to attract global capital that sees Africa as a place of valuable investments and technology that can create significant value. This achievement at scale remains the primary target for TLcom Capital and other venture capital firms in Africa.
