LoftyInc Capital, recognized as one of Africa’s most proactive investment firms, has successfully secured new funding to bolster its investments in startups across the continent. This development comes in the wake of a report from VC firm Partech, which indicated only a minor decline in funding deals and volumes in Africa over the past year. For more than ten years, LoftyInc Capital has dedicated itself to nurturing startups at the pre-seed and seed stages.
Recently, the firm announced the successful first close of its third fund, LoftyInc Alpha, which has raised an impressive $43 million. This new fund signifies a strategic pivot in LoftyInc’s investment approach, as it will now focus on late-seed and Series A startups, while maintaining its commitment to key markets including Nigeria, Egypt, Kenya, and Francophone Africa. Idris Ayo Bello, the founder and managing partner, provided these insights into the firm’s evolving strategy.
The initial closing of LoftyInc Alpha attracted a diverse array of limited partners, including sovereign wealth funds from the Middle East and Africa, such as Egypt’s MSMEDA and Tunisia’s Anava Fund of Funds. Additionally, development finance institutions like FMO, Proparco (FISEA), AfricaGrow, the International Finance Corporation (IFC), and U.S.-based First Close Partners participated, alongside high-net-worth individuals (HNIs) from Africa and family offices from Europe.
Idris Ayo Bello, who initiated LoftyInc’s first investment vehicle in 2012, has witnessed the evolution of Africa’s tech landscape firsthand. His firm has supported startups through various phases, including the diversification beyond fintech, the emergence of tech talent, the unicorn boom of 2021, and the current slowdown in funding. The pre-seed investment vehicle, which began as an angel network, has since evolved into a self-sustaining community of over 250 investors across Africa and the diaspora. This foundation paved the way for LoftyInc’s first structured venture fund, launched five years later.
In 2017, the Lagos-based venture capital firm raised its inaugural institutional fund, totaling $1.1 million, sourced exclusively from HNIs and fully deployed within Nigeria. Bello, who co-founded the fund with Marsha Wulff and Michael Oluwagbemi, reported that it yielded a remarkable 5.7x DPI (distributions to paid-in capital) for its investors, driven by successful exits and secondary sales from companies like Flutterwave and Reliance Health, a health tech startup backed by General Atlantic.
By 2021, LoftyInc launched its second VC fund, initially aiming for $10 million but ultimately closing at $14.2 million. This fund expanded its geographical reach beyond Nigeria, adopting a pan-African investment strategy that included startups in Egypt, South Africa, and Francophone Africa—regions where LoftyInc intends to maintain an active presence. Notably, among its investors was Meta, which participated through its New Product Experimentation (NPE) team, marking the tech giant’s first and only investment in an African venture capital fund.
Addressing the gap between seed and Series A funding, LoftyInc is refining its investment strategy with its third fund to tackle a critical challenge in Africa’s startup ecosystem: the low graduation rate from pre-seed to Series A. According to the Partech report, Africa’s VC landscape experienced a significant decline in average ticket sizes at the Series A (-18%) and Series B (-27%) levels last year.
Bello emphasized that while LoftyInc’s angel networks and micro funds have effectively covered pre-seed and seed rounds, the real funding gap arises at the late-seed stage, where startups require structured support to scale and secure Series A funding. He stated, “At pre-seed and seed, there’s a lot of hype, but by Series A, the questions investors ask are very different. Our goal is to come in at seed, but our mandate is to help you get to Series A. We want to be the firm that gets startups over that hump.”
LoftyInc plans to make follow-on investments and engage co-investors to strengthen the pipeline for top-tier African investors at the Series A and growth stages, including firms like TLcom Capital, Partech, and Norrsken22. Bello highlighted that LoftyInc distinguishes itself in the competitive early-stage investment landscape in Africa by leveraging the operational expertise and networks of its partners. With over 200 investments and 14 exits under its belt, the firm aims to provide more than just capital, offering market access, business development support, and investor matchmaking to its portfolio companies.
To support its evolving strategy and expanding portfolio, LoftyInc has enhanced its leadership team with the addition of Mariam Kamel and Kevin Simmons as general partners. Their backgrounds in investment banking, angel investing, and operational venture capital across the Middle East and Africa will be instrumental in deepening the firm’s presence in East, North, and Francophone Africa, where at least 30% of the fund will be deployed.
Bello remarked, “They bring in fund and investor experience, which ties into our geographical expansion and exit plans,” adding that Oluwagbemi and Wulff will continue to manage LoftyInc’s previous funds while facilitating the transition to this larger, more structured fund.
LoftyInc Alpha is committed to supporting innovations that drive Africa’s “everyday economy,” with a particular emphasis on financial services, which remains the dominant sector in African tech, accounting for 60% of the over $2 billion in equity deals raised by startups last year. Other focus areas include logistics and transport, health tech, retail, climate, and deep tech and AI, which serve as enablers across various sectors. The firm’s portfolio includes notable startups such as Moove, a vehicle financing platform backed by Uber, Egypt’s Robinhood-style trading app Thndr, and OmniRetail, an African B2B e-commerce platform.8
