Quick Summary: LoftyInc Capital has raised $43 million for its third fund, LoftyInc Alpha, to support late-seed and Series A startups in Africa. The fund aims to bridge the funding gap and strengthen key markets like Nigeria, Egypt, Kenya, and Francophone Africa. Backed by global investors, the firm continues to expand its impact on Africa’s startup ecosystem. LoftyInc also enhances its leadership team to drive strategic growth.
LoftyInc Capital, one of Africa’s most active investment firms, has successfully raised $43 million for its third fund, LoftyInc Alpha. This new fund aims to support late-seed and Series A startups across the continent. The funding comes at a crucial time, following a report by VC firm Partech, which highlighted only a slight decline in African funding deals over the past year.
For over a decade, LoftyInc Capital has focused on nurturing startups at the pre-seed and seed stages. Now, with this third fund, the firm is shifting its strategy to provide much-needed support for startups transitioning to Series A. Key markets include Nigeria, Egypt, Egypt, and Francophone Africa. Founder and Managing Partner Idris Ayo Bello shared insights into the firm’s evolving investment approach.
Strong Backing from Global Investors
The initial close of LoftyInc Alpha attracted a diverse group of limited partners, including sovereign wealth funds from the Middle East and Africa. Notable investors include Egypt’s MSMEDA and Tunisia’s Anava Fund of Funds. Development finance institutions such as FMO, Proparco (FISEA), AfricaGrow, the International Finance Corporation (IFC), and U.S.-based First Close Partners also participated. Additionally, high-net-worth individuals (HNIs) from Africa and family offices from Europe contributed to the fund.
A Decade of Growth in African Venture Capital
Since launching its first investment vehicle in 2012, LoftyInc has played a key role in Africa’s evolving tech landscape. The firm has supported startups through various industry shifts, including the rise of tech talent, the unicorn boom of 2021, and the recent slowdown in funding.
Initially an angel network, LoftyInc’s pre-seed investment vehicle has grown into a self-sustaining community of over 250 investors across Africa and the diaspora. This foundation paved the way for the firm’s first structured venture fund, launched in 2017.
LoftyInc’s Successful Track Record
In 2017, LoftyInc raised its first institutional fund of $1.1 million, sourced entirely from HNIs and focused on Nigeria. The fund delivered an impressive 5.7x DPI (distributions to paid-in capital) through successful exits, including Flutterwave and Reliance Health.
By 2021, LoftyInc launched its second VC fund, initially targeting $10 million but closing at $14.2 million. This fund expanded its investments beyond Nigeria into Egypt, South Africa, and Francophone Africa. Notably, Meta participated through its New Product Experimentation (NPE) team, marking its first and only investment in an African VC fund.
Addressing the Series A Funding Gap
With its third fund, LoftyInc aims to bridge a critical gap in Africa’s startup ecosystem: the transition from pre-seed to Series A. A recent Partech report revealed a significant drop in average Series A (-18%) and Series B (-27%) funding sizes in Africa.
Bello emphasized that while LoftyInc’s angel networks and micro funds have been effective at the pre-seed and seed levels, late-seed funding remains a challenge. “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,” he said.
To strengthen this pipeline, LoftyInc plans to make follow-on investments and collaborate with top-tier African investors at the Series A and growth stages, including TLcom Capital, Partech, and Norrsken22.
Strengthening Leadership for Future Growth
To support its expanding strategy, LoftyInc has added Mariam Kamel and Kevin Simmons as general partners. Their backgrounds in investment banking, angel investing, and venture capital will help deepen the firm’s presence in East, North, and Francophone Africa. At least 30% of the new fund will be deployed in these regions.
Bello noted, “They bring in fund and investor experience, which ties into our geographical expansion and exit plans.” Meanwhile, Oluwagbemi and Wulff will continue managing LoftyInc’s previous funds.
Investing in Africa’s Everyday Economy
LoftyInc Alpha remains committed to supporting startups that drive Africa’s “everyday economy.” The firm will prioritize investments in financial services, logistics, transport, health tech, retail, climate, and deep tech, including AI-driven solutions.
Notable portfolio companies include Moove, a vehicle financing platform backed by Uber, Egypt’s Robinhood-style trading app Thndr, and OmniRetail, an African B2B e-commerce platform.
With this new fund, LoftyInc Capital aims to solidify its role in helping African startups scale, ensuring they have the capital and strategic support needed to succeed.
