Verod-Kepple Africa Ventures (VKAV) plans to back 21 growth-stage companies across the continent after closing its first $60 million fund. The pan-African VC hit the milestone following fresh backing from new investors including Nigeria’s SCM Capital (formerly Sterling Capital Markets Limited), Taiyo Holdings and C2C Global Education Japan.
The latest capital infusion follows the fund’s first and second closes in 2022 and last year, respectively, backed by several investors, including Japanese institutional investors such as SBI Holdings, Toyota Tsusho Corporation, Sumitomo Mitsui Trust Bank, the Japan International Corporation Agency and the Japan ICT Fund.
Verod-Kepple is the latest African VC to capitalize amid an ongoing investment downturn, allowing it to provide the capital needed by Series A and B startups even as local capital pools for growth-stage companies remain limited.
“Over the past few years, we’ve seen an increase in pre-seed and seed funds, and we’ve felt that there’s not enough capital at the investment stage to get these companies to the next level in terms of scale, exits, or even as sustainable profitable businesses. VKAV partner Ory Okolloh told TechCrunch.
“Our focus is Series A and B, but we have the ability to go earlier to pre-Series A if we think it’s a good opportunity. We believe there is still a need for more capital at the development stage with local investors,” he said.
Okolloh, Ryosuke Yamawaki and Satoshi Shinada launched the VC firm in 2022, as a joint venture between Verod Capitalprivate equity firm and Kepple Africaa Tokyo-based venture capital firm.
The VC firm says the partnership was needed for the fund to provide meaningful hands-on support, including implementing operational best practices, improving governance structures and navigating the complex macroeconomic environment in Africa, to portfolio companies in their scale-up phase. Verod-Kepple made this assumption after noticing that as more startups moved from pre-seed and seed to Series A and B and beyond, their transition and scaling success required a more institutional approach.
How VKAV makes investments
The VKAV fund supports start-ups creating infrastructure for the digital economy, solving inefficiencies faced by businesses and market makers for the emerging consumer population. Okolloh says their focus on the latter is about supporting companies targeting changes in consumer trends.
The VC fund invests between $1 million and $3 million, with the potential to continue, having already raised $17.5 million and investing an average of $1.5 million in 12 companies from Nigeria, Egypt, Kenya, Morocco , Ivory Coast and South Africa. Investments span fintech, mobility, e-commerce, proptech, deep tech, insurtech, energy and healthcare sectors. Moroccan B2B e-commerce and retail startup Chari and insurtech mTek-Services.
And while the fund is sector agnostic, it pays attention to vertical ERP startups and those offering integrated financial services and players in the future of the workplace. They are also “increasingly applying an AI lens to understand how GenAI as a foundational infrastructure is going to change the production and distribution of businesses with technology.”
Okolloh said the fund plans to continue to explore other ecosystems, such as Angola, Zambia, DRC and Tunisia, through its investor group or partners, in search of new investment opportunities, especially in underserved markets, and as continues its push to be pan-African.
“Given the diversity of markets, changing macros, underserved markets from an investor perspective, we believe it is important to take a pan-African and agnostic approach,” said Okolloh, who has experience in technology and investments having previously served as executive of Omidyar Network and Google Africa.
“We’re definitely looking at a diverse portfolio, not only in terms of gender and founders, but also sector and market.”
The Verod-Kepple fund joins the growing number of African VC funds receiving support from Japanese institutional investors looking to diversify their risks. Recently, Novastar Ventures also received capital commitments from MOL Group and SBI Holdings.
“As an investor, the connection with Japan is important and we hope to later expand it to an even wider connection in Asia. I think immersing yourself in stories and experiences and working with investors and other partners from a market where you can see financial transformation in your lifetime is critical,” said Okolloh.
“I am excited for the opportunity to learn, collaborate, share and even exchange with a different part of the world where their experiences are much more relevant. And most important of all, supporting great founders in a meaningful way that allows them to thrive.”
