One of Africa's most active investors known for their early bets on unicorns such as Flutterwave, Andela and Wave has secured fresh capital to invest in startups across the continent. According to a report by VC Firm Parttech, this is because last year we only saw a small dip in Africa's funding transactions and volume.
Loftink Capital, which has supported startups in the pre-seed and seed stages for more than a decade, has reached $43 million at the first end of its third fund, Loftink Alpha.
Unlike its previous focus, the fund targets seed and series startups while maintaining a geographic focus across Nigeria, Egypt, Kenya, and Franco Pound Africa.
The first proximity attracted a diverse group of limited partners, including sovereign wealth funds in the Middle East and Africa, such as MSMEDA in Egypt and the Anaba Fund in Tunisia. Development agencies such as FMO, Proparco (FISEA), Africagrow, IFC and the first US-based close relatives also joined together with African Highnet Individuals (HNIs) and European Family Offices.
Bello, who launched LoftyINC's first investment vehicle in 2012, is one of the few investors to first-hand witness to the technological evolution in Africa. His company supports startups through a range of phases, from diversifying startups beyond fintech to the rise of tech talent, to the unicorn boom of 2021 and current funding.
Operated by an angel network that has grown into an independent community of over 250 investors in the African and Diaspora, the pre-seeded vehicle built Loftink's first structured venture fund foundation five years later.
In 2017, the Lagos-based venture capital firm was HNIS, raising the first institutional fund fully deployed in Nigeria for $1.1 million. Bello, who launched the fund with Marsha Wulff and Michael Oluwagbemi, said it delivered 5.7x DPI (cash return) to investors driven by exits and secondary from Reliance Health, a popular health technology startup supported by Flutterwave and Atlantic.
By 2021, LoftyInc launched its second VC fund, initially targeting $10 million, but it had achieved $14.2 million. The second fund expanded beyond the market range outside of Nigeria, took an African approach and invested in start-ups in Egypt, South Africa and French-speaking countries.
Some of the investors were meta through the NPE team, marking the sole investment of the tech giant in Africa's VCs.
Filling the gap between seeds and series
With the third fund, Loftink is improving its investment strategy to tackle key challenges in the African startup ecosystem. From series to series VC landscapes, the sharpest average ticket sizes for Series A (-18%) decreased, while Series B (-27%) decreased the sharpest average ticket sizes last year, according to a part-check report.
Bello points out that while Loftink's Angels Network and Microfunds are helping to cover pre-seed and seed rounds, a real funding gap appears in the second half of the seed, where startups need structured support to expand and protect Series A capital.
“There's a lot of hype between pre-seeds and seeds, but from Series A, the questions investors ask are very different,” he said. “Our goal is to join the seed, but our mission is to help you reach Series A.
Series A Round Startup Positioning plans to make subsequent investments and invite co-investments. It will also “opportunistically” strengthen the pipeline of top-ranked investors in Africa at the growth stages of Series A and TLCOM Capital, Parttech and Norrsken22.
According to Bello, Loftyinc is differentiated in Africa's busy early stage investment markets by leveraging its partners' operational expertise and networks. With over 200 investments and 14 exits, the managing partner assumes that the company will provide more than capital, providing market access, business development support, and investor matchmaking to portfolio companies.
LoftyINC has expanded its leadership team with its latest funds to keep up with its evolving strategy and growing portfolio. This is a key move in local expertise and execution that invests in startups that require localized support.
Over the past two years, the company has added Mariam Camel and Kevin Simmons as general partners. They apply investment banking, angel investment, and management VC experiences across the Middle East and Africa to deepen the company's presence in the East, North, and French-speaking regions of Africa (at least 30% of the funds are deployed).
“They bring the funds and investors experience tied to our geographic expansion and exit plans,” Bello said, adding that Olwagbemi and Wolf will continue to manage Loftink's previous funds, supporting this transition to a larger, more structured fund.
Loftyinc Alpha says innovations that drive Africa's “everyday economy” are supported. Most of it revolves around financial services, which remains the most dominant sector in Africa's technology, accounting for 60% of the $2 billion stock trading startups raised last year. Logistics and transportation. Health Technology; Retail; Climate; Deep Tech and AI apply as enablers across other sectors.
The company's portfolio spans notable startups, including the Move Uber-backed vehicle funding platform, THNDR, Egypt's Robinhood-style trading app, and OmnireTail, Africa's B2B e-commerce platform.