TLcom Capital, a prominent venture capital firm situated in Nairobi, has successfully concluded the funding round for its latest endeavor, TIDE Africa II, amassing a significant $154 million aimed at supporting nascent early-stage startups. This new fund marks a momentous leap from the firm’s initial venture, which accumulated $71 million and closed in February 2021. TIDE Africa II is nearly double the size of the original fund.
The journey to this financial milestone began with an early first close, achieving $70 million in January 2022. It was anticipated that a second closing would follow by year’s end. However, it took more than the anticipated time to finalize due to larger-than-expected investments that necessitated additional time for proper documentation.
Maurizio Caio, the visionary founder and managing partner at TLcom Capital, acknowledged that these substantial commitments were the primary reason for the fund’s extended timeline. Despite the delay, the achievement is significant, especially given the broader context of the venture capital climate.
Funding for startups within Africa experienced a slump in 2022, mirroring a global downturn in venture capital interest. In 2023, African startups experienced a relatively low capital influx, securing $3.2 billion—the smallest sum since 2020’s $2.1 billion. This decrease was partly due to the retreat of roughly 400 unique foreign investors from the African market. However, indigenous venture capital entities like TLcom Capital have intensified their involvement in the face of this decline.
TLcom Capital engages with startups from their inception, starting from the seed or Series A funding stages, and continues to provide capital as these companies progress through their growth phases. Maurizio Caio specified that initial investments from the firm typically fall within the $1 to $3 million bracket.
In addition to general tech investments, TLcom Capital has demonstrated a keen commitment to supporting female entrepreneurship in the tech industry. A notable example of this commitment is their early investment of $2 million in FirstCheck Africa, a fund dedicated to female-led tech startups, which was established in January 2021.
Caio expressed TLcom’s ambitious goal to validate the African tech ecosystem’s profitability to the global venture capital industry over the coming three to five years. The firm plans to allocate investments across 20-25 startups, continuing the investment strategy used in their first fund, which directed over 80% of its investments into Seed or Series A rounds.
Among the noted investors backing TIDE Africa Fund II are prestigious organizations and entities such as the European Investment Bank (EIB), Allianz, the DEG Impact and AfricaGrow joint venture, Visa Foundation, and Bertelsmann.
With the new fund, TLcom Capital has not only bolstered its presence by expanding to regions like Egypt and South Africa but also seeks to collaborate with pioneering African founders. These partnerships aim to confront some of the continent’s most intricate challenges by devising and implementing innovative solutions.
TIDE Africa Fund II is already in action with investments in ventures such as LittleFish, a software company based in Cape Town that develops payment and banking products tailored for SMBs with a retail focus, and ILLA, a Cairo-based firm specializing in middle-mile logistics solutions.
