TLcom Capital doubles previous amount to raise $154mn for continent’s start-ups in a move that could help ease sector gloom
Nairobi’s TLcom Capital, known for backing successful startups like Vendease, Seamless HR, and uLesson, has sealed the final round for its TIDE Africa II fund, totaling $154 million, aimed at nurturing early-stage startups. This milestone comes after the initial $70 million close in January 2022, with expectations to finalize the fund’s second phase by year-end.
The journey to surpass the funding goal spanned over two years, attributed partly to substantial investments necessitating documentation adjustments, according to TLcom Capital’s founder and managing partner, Maurizio Caio.
TIDE Africa II dwarfs TLcom’s previous fund, which amounted to $71 million and concluded in February 2021. As global VC interest waned post-2022, Africa witnessed a slowdown in startup funding, with 2023 recording a meager $3.2 billion, the lowest since 2020’s $2.1 billion. However, TLcom and similar local VC entities have emerged as key players amid the departure of 400 foreign investors.
TLcom Capital’s investment focus typically commences at the seed stage or Series A, with follow-on funding for portfolio companies reaching growth milestones. Caio highlighted their typical initial check size ranging from $1 to $3 million.
Moreover, TLcom is committed to supporting female-founded tech ventures, having allocated $2 million to FirstCheck Africa, a pre-seed fund aimed at female entrepreneurs, since its inception in January 2021.
With aspirations to demonstrate Africa’s potential for lucrative tech investments globally, TLcom aims to invest in 20-25 startups over the next three to five years, following a strategy mirroring its successful first fund, with over 80% of investments at Seed or Series A.
Investors in TIDE Africa Fund II include prominent entities like the European Investment Bank (EIB), Allianz, DEG Impact’s AfricaGrow, Visa Foundation, and Bertelsmann.
Expanding its reach to Egypt and South Africa, the new fund empowers TLcom to collaborate with African innovators in addressing the continent’s significant challenges. Already, TIDE Africa Fund II has facilitated investments in South Africa’s LittleFish, a Cape Town-based software company enabling payment and banking solutions for retail-focused SMBs, and Egypt’s ILLA, a middle-mile logistics provider based in Cairo.