Idris Ayo Bello, founder of LoftyInc. Image Credits: Weetracker
LoftyInc Capital, one of Africa’s prominent hegemons in the venture capital field, has now raised $43 million in the first close of its of its third fund. The venture capital firm has gained a reputation for backing continental startups like Flutterwave and Andela at their nascent stages. With this new funding, LoftyInc aims to raise another breed of startups to dominate the African continent.
LoftyInc stepped on the path to becoming one of Africa’s biggest VCs in 2012 with a network of angel investors. The network soon evolved into a community of over 250 investors across Africa and its diaspora. This community laid the groundwork for LoftyInc to pull off its first institutional fund in 2017. The Nigerian-focused vehicle was worth $1.1 million, was exclusively backed by high-net-worth individuals (HNIs), and delivered over 5 times cash return to investors.
Coming off the back of this success, LoftyInc launched a second funding round in 2021, with $10 million set as a target. However, it was able to raise $14.2 million, with which it broadened its geographical scope beyond Nigerian borders, spreading to South Africa, Francophone Africa, and Egypt. A notable feature of this fund was an investment from Meta, its first adventure into Africa’s venture capital space.
The firm has established a new Lagos-based vehicle, dubbed LoftyInc Alpha, in what seems to be a crucial moment in Africa’s growing startup landscape. With this new $43 million LoftyInc Alpha fund, the venture capital firm will be able to pursue a step-up in scale and ambition. It aims to cater to late-seed and Series A stage companies across Nigeria, Egypt, Kenya, and Francophone Africa, helping them bridge the critical funding gap hindering the progression of African start-ups. LoftyInc will channel its latest fund to address the “Series A Crunch”. Data has shown that startups who have enjoyed buoyant funding from a multitude of angel investors and micro-funds experience a decline in average ticket sizes are Series A and beyond, crippling the scaling potential of promising ventures.
“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.” explains Idris Ayo Bello, founder and managing partner of LoftyInc.
This first close saw participation from a diverse, valuable limited partner (LP) base, including sovereign wealth funds from the Middle East and Africa such as Egypt’s MSMEDA and Tunisia’s Anava Fund of Funds. Development finance institutions (DFIs) including FMO, Proparco (FISEA), AfricaGrow, IFC, and First Close Partners have also committed capital, alongside African HNIs and European family offices.
LoftyInc Alpha represents another stage in the evolution of the firm, which is now transitioning from the pre-seed and seed investments it has focused on for over a decade. By including LPs in the funding round, the firm leverages high-level networks and expertise that are crucial for navigating Africa’s complex market. LoftyInc has also strengthened its leadership ranks with the addition of Mariam Kamel and Kevin Simmons as general partners. The duo have their experience in investment banking, angel investing, and operational VC across the Middle East and Africa to call upon as they aim to deepen the firm’s regional expertise, particularly in East, North, and Francophone Africa, where at least 30% of the fund will be deployed.
