Nigeria: Ventures Platform aims to use $40m fundraising to load up on fintech

By David Whitehouse
Posted on Monday, 17 January 2022 15:20

Kola Aina, founder and general partner at Ventures Platform. Photo supplied.

Nigerian start-up investor Ventures Platform is seeking funds to increase its exposure to domestic fintech, founding partner Kola Aina tells The Africa Report.

The fund, which also invests across Africa, is trying to raise $40m. Ventures Platform had a first close in December and is aiming for a final close in the first half of this year. The fund has secured backing from investors including the Nigeria Sovereign Investment Authority (NSIA), United Africa Company of Nigeria (UAC), VFD Group, Ycombinator CEO Michael Siebel and Paystack co-founder Shola Akinlade. Aina is already investing some of the new money raised.

Ventures Platform has invested in 70 companies to date, including Piggyvest, Paystack, Kudi and Thrive Agric. In 2021, it made new investments in Nigeria, Kenya, Egypt, and Zambia. Aina sees fintech, agritech, healthtech, bioscience, digital infrastructure and software as a service (Saas) as Africa’s most promising growth investment themes.

The fund is “very bullish” on its main market Nigeria and is also keen on raising its exposure to Egypt and Kenya, Aina says. There is a need for caution on Nigerian start-up valuations, which investment from the US has pushed up from a level which was previously too low, says Aina, who is based in Lagos. But fintech in Nigeria is “barely scratching the surface of what is possible. There is still a lot of value to capture.”

The Nigerian market offers scale and an “abundance of talent” to develop the digital ecosystem. Start-ups from Nigeria will expand to the rest of Africa, and vice-versa, Aina says. “Nigeria is our beachhead for Africa.”

  • Investors in the fund are divided roughly equally between African and non-African, Aina says. Local investment interest reduces the risks for international investors, he adds.
  • Aina is ready to increase investments in portfolio companies that do well.
  • He expects to start seeing fintech IPOs in Nigeria, as well as in Egypt.
  • “We are patient capital,” with investments often held for between seven and ten years.

Start-Up bill

Aina is encouraged by a bill designed to help start ups which has been approved by Nigeria’s executive council of ministers and will be presented to the national assembly. The bill is presented as a joint initiative by Nigeria’s tech startup ecosystem and the presidency to harness the digital economy’s potential through co-created regulations.

The proposals would establish a national council for digital innovation and entrepreneurship, on which the country’s president and central bank governor would sit alongside representatives of the Startup Consultative Forum.

  • It seeks to offer fast and easy registration of intellectual property rights such as copyrights, patents and trademarks. The bill would also create a credit guarantee scheme and a start-up investment fund.
  • According to a report from Tech Hive Advisory and the Ikigai Innovation Initiative, the bill is “definitely a step in the right direction” towards an enabling start-up environment.
  • If it becomes law, the bill would improve incentives and offer regulatory certainty for start-ups, Aina says.

Bottom line

Nigeria’s start-up bill can help the country’s fintechs reach their full potential.

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