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LoftyInc Capital, a leading early-stage investor in Africa, has successfully raised $43 million in the first close of its third fund, LoftyInc Alpha. This fund marks a strategic shift in focus from pre-seed and seed-stage investments to supporting late-seed and Series A startups across Nigeria, Egypt, Kenya, and Francophone Africa.
The milestone comes as African venture funding demonstrates resilience, with only a slight decline recorded last year despite global economic challenges, according to a report by Partech.
For over a decade, LoftyInc has been instrumental in the growth of Africa’s startup ecosystem, backing early-stage companies that have evolved into unicorns, such as Flutterwave, Andela, and Wave. However, as Africa’s venture capital landscape matures, many startups are facing increasing challenges in securing funding beyond the seed stage.
“We’ve observed many promising startups struggle to bridge the gap between seed and Series A,” said Idris Ayo Bello, founder and managing partner of LoftyInc. “With this new fund, we aim to position ourselves as the partner that helps these startups scale and unlock their next growth phase.”
Africa’s startup ecosystem has seen a notable decrease in average ticket sizes for Series A (-18%) and Series B (-27%) investments over the past year, making follow-on funding more difficult to secure. LoftyInc Alpha is designed to address this issue by offering structured capital and strategic support to help startups navigate this critical phase.
A Diverse and Strong Investor Network
The first close of LoftyInc Alpha has garnered investment from a wide range of backers, 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 like FMO, Proparco (FISEA), AfricaGrow, IFC, and U.S.-based First Close Partners have also participated, along with African high-net-worth individuals and European family offices.
This diverse backing reflects strong confidence in LoftyInc’s ability to identify and nurture high-potential startups across Africa.
Proven Track Record of Successful Investments
LoftyInc launched its first institutional fund in 2017, raising $1.1 million, which was fully deployed in Nigeria. This fund yielded a remarkable 5.7x cash return to investors, driven by successful exits, including Flutterwave and health tech company Reliance Health.
By 2021, LoftyInc expanded its reach with a second fund, closing at $14.2 million, and taking a pan-African approach. This expansion resulted in investments in critical markets like Egypt, South Africa, and Francophone Africa.
Notably, LoftyInc’s second fund also attracted investment from Meta’s NPE team, marking the tech giant’s only known investment in an African VC firm.
More Than Just Capital
LoftyInc’s investment strategy extends beyond capital. The firm leverages its vast network and operational expertise to provide startups with market access, business development support, and investor matchmaking.
With over 200 investments and 14 successful exits, LoftyInc continues to refine its approach to meet the evolving needs of African startups. LoftyInc Alpha is poised to play a pivotal role in helping startups transition from early traction to scalable growth, ensuring more African companies successfully reach Series A and beyond.
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