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Oui Capital, a pan-African early-stage VC firm, hits first close of its $30M second fund

Oui Capital, a pan-African early-stage VC firm, hits first close of its $30M second fund Image
  • Posted on 01st Aug, 2022 08:33 AM
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Oui Capital, an Africa-focused VC firm based in Lagos and Massachusetts, announced today that it has completed the first closing of its $30 million second fund, Oui Capital Mentors Fund II, as it seeks to strengthen its presence on the continent.  The firm, founded in 2019 by Olu Oyinsan and France…

Oui Capital, an Africa-focused VC firm based in Lagos and Massachusetts, announced today that it has completed the first closing of its $30 million second fund, Oui Capital Mentors Fund II, as it seeks to strengthen its presence on the continent. 

The firm, founded in 2019 by Olu Oyinsan and Francesco Andreoli, launched its debut fund at $10 million. Since then, Oui Capital has made 18 investments in technology sectors spanning different industries such as fintech, logistics & mobility, e-commerce, healthcare, and enterprise software. Some names include TeamApt, MVX, Akiba Digital, Duplo, Ndovu, Maad, Intelligra, Aifluence and Pharmacy Marts. 

Oui Capital made eight investments last year and this second fund signals the VC’s intention to keep up with that pace. The $30 million fund, just like the first, will back sub-Saharan startups in the pre-seed and seed stages. So far, the firm has reached its first close at a little over $11 million and expects to complete the final close by Q4 2022. 

Managing partner Oyinsan, in an interview with TechCrunch, said Oui Capital’s first fund delivered early solid returns, with a MOIC (multiple on invested capital) in excess of 7 times. He said that one of the reasons why the firm managed to accomplish this lies in the “sparks” that determine which startup to invest in or not: team, market, knowledge of the customer and tech, and customer enthusiasm. 

But even though firms follow a manual (like Oui Capital and its aforementioned investment strategies), not all deals turn out great eventually. Oui Capital provides more extensive support for some of these startups by driving partnerships and sales, facilitating hires and providing bridge investments. With respect to follow-on capital, the managing partner said Oui Capital makes such investments proactively as part of the firm’s ongoing portfolio monitoring. As it stands, Oui Capital has made follow-on investments in about 20% of its portfolio companies. 

“We go the extra mile with founders whom we partner with and this is why we maintain a relatively smaller portfolio compared to many seed funds. However, there is a critical distinction between the responsibilities of a VC as an investor and as a fund manager,” said the managing partner.

“Being an investor begets the type of die-hard optimism and support as earlier described. Being an effective fund manager also puts the fiduciary responsibility on you to know when to stop devoting scarce resources to problems that might prove too difficult to fix and dedicate these resources to higher-performing companies in your portfolio to minimize losses and maximize investor value.”

The Oui Capital team

The Oui Capital team

Though economic cycles like the one the startup world is experiencing are usually short to medium-term, Oyinsan echoes what local investors have communicated these past few months: the return of sticking to first principles and backing companies with strong fundamentals, unit economics, and disciplined valuations. This event has created an opportunity for investors, including Oui Capital, to invest up the chain, especially now that it has newly infused capital. 

According to Oyinsan, the firm will be looking to cover the full spectrum of investments before Series A, including bridge rounds, an activity it will amplify, particularly during this venture capital crunch. In relating news, Zedcrest Capital, another VC firm, launched a $10 million ’emergency fund’ to bail out startups in pre-Series A stages last week. 

From this new fund, Oui Capital intends to write initial checks of up to $750,000 (a 10x increase from the ticket size of its first fund) with reserves in place for such follow-on investments. “Expect us to be leading many more deals across the ecosystem and vocalizing firm initiatives — all things that we’ve been doing quietly in the past four years, but now looking to double down on these with the new fund,” Oyinsan added. 

Oui Capital’s second fund welcomed a mix of individual and VC investors as limited partners. Individual investors such as Brad Feld, Seth Levine and Ryan McIntyre (Foundry Group’s partners), Gbenga Oyebode, Alitheia Capital’s Tokunboh Ismael, Idris Alubankudi, and TeamApt CEO Tosin Eniolorunda participated. 

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