At a recent investor conference, early African investor Ui Capital returned $4 million of its debut capital to limited partners following the sale of a partial stake in business banking platform Monypoint. It was announced that.
The African fintech unicorn has so far proven to be a standout investment for five-year-old Oui Capital. When it launched its first fund, it invested $150,000 in the Nigeria-based company, an early bet that has since earned $8 million in profits, enough to pay off the fund. produced.
Specifically, last October, when Moniepoint raised $110 million in a Series C round led by Development Partners International at a valuation of $1 billion, Oui Capital sold a portion of its stake in the transaction. did. The funds are now being repaid and future earnings are pure profit for the investors.
This is a rare feat for a young venture capital firm, and while many venture capital firms around the world fail to return their initial funding, it is even rarer in Africa's venture ecosystem. Still, it highlights how lucrative some early-stage bets, especially in fintech, can be on the continent. Oui Capital has backed other unicorns such as Andera and Flutterwave before joining other unicorns like CRE VC and 4DX Ventures, which returned their initial funds, according to two people familiar with investor deals on the continent. He will join African Investors.
TechCrunch reached out to Oui Capital for comment, and the company confirmed the news.
Moniepoint, formerly known as TeamApt, wasn't a household name in 2019 when Oui Capital first considered it. At the time, the company primarily built financial products and software for itself and banks.
Oui Capital, founded by Olu Oyinsan and Francesco Andreoli, was one of the early investors and helped the company pivot to Moniepoint, a business banking and payments platform that went on to become Nigeria's largest commercial acquirer. We are also one of the few companies that do so.
“They worked with us through the stages from product-market fit to production,” said Tosin Enioluwadara, co-founder and CEO of Moniepoint in 2021. He talked about Oui Capital in a video from 2017. “Or [managing partner at Oui Capital] It was helpful as advice. Discuss strategy, governance, and important matters affecting the company. They have also been instrumental in our investment campaigns, from introducing potential investors to sometimes just thinking about our story and positioning…”
Exits remain rare in Africa's tech industry, with only 143 of 2,971 venture deals since 2019 resulting in exits, according to The Big Deal. Most startups are still in early or growth stages, far from the maturity required for a significant exit. Unlike developed markets, where there are solid M&A and IPO options, Africa's technology ecosystem is still growing, with fewer startups in a position to exit quickly.
On the other hand, many Africa-focused VC firms are still waiting for returns, as venture investments typically take five to 10 years to mature. In Oui Capital's case, that wait was five years. The company was valued at $12.5 million when it participated in Moniepoint's seed round, as revealed in an investor report seen by TechCrunch.
Anecdotally, the smaller the fund, the easier it is to return it due to its size. Data from Cambridge Associates, which builds and manages investment portfolios for institutional investors, supports this trend.
But more importantly, Oyinsan believes the company's traction so far has been in the construction of its portfolio of funds. “It's not just the size of the fund that matters; it's deciding what to invest in, your entry price, how many shares to hold, how much to invest, and when to exit,” he told TechCrunch told.
Other startups in Oui Capital's portfolio include Duplo, which digitizes payment flows for B2B companies in Africa; Maad is a B2B e-commerce platform for fast-moving consumer goods. Matta, a B2B marketplace for chemicals, was funded by its first fund, Mentors Fund 1.
The investor is involved in 22 startups across two funds and writes checks of up to $400,000 to seed-stage startups across Africa.
In 2022, Oui Capital launched its second fund, Mentors Fund 2. Oyinsan said the early-stage company originally targeted $30 million, but ended up with $12 million. He also said the fund has no plans to rush to raise money due to its strong position, but could raise a third one later this year.