4Di Capital, a South African early-stage venture capital firm, has announced the second closing of its new $25 million seed fund, created in collaboration with DotExe Ventures in Mauritius, with an undisclosed raise from Mauritian conglomerate, IBL Group, through its investment vehicle, IBL Link Investments.
This comes on the heels of the SA SME Fund’s initial closing of $8 million, with money aimed at seed and post-seed stage firms in South Africa, East Africa, and the continent as a whole.
The fund will specifically target companies with regional or worldwide ambitions and will remain open to new investors until the final closing in early 2023.
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4Di Capital, founded in 2009 by a group of entrepreneurs, has established itself as a highly regarded investor in the African venture capital market, with investees benefiting from the partners’ extensive hands-on experience in growing and scaling African startups.
This is supported by the firm’s portfolio of seed investments in notable firms, including as Aerobotics, LifeQ, VALR, and Nairobi-based Wasoko, which have since obtained significant late-stage funding.
“It is with great excitement that we welcome IBL Group and IBL Link Investments to our investor base. A key feature of our firm’s approach is that we prefer to have fewer investors and work very closely together with them, maximising value-add and providing a close look at the coalface. Having spent the past 13 years refining our investment strategy and expanding our footprint past South Africa into the East African market and beyond, we look forward to collaborating hand-in-hand with our new partners. IBL features a network of more than 280 companies across 19 markets which will be invaluable as we continue our efforts to support the growth and development of the next cohort of highly scalable startups in the region,” Justin Stanford, partner at 4Di Capital, said.
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The collaboration between 4Di Capital and IBL comes at a time when venture capital is emerging as a promising asset class on the African continent: While markets in the United States, Asia, and Europe plummeted in the first quarter of 2022, Africa was the only region in the world to experience three-digit growth, with venture investment increasing by 150% year on year to a record $1.8 billion, up from $730 million in the same period in 2021.
Furthermore, Kenya epitomised the attractiveness of the East African market, attracting more venture capital funding in the first three months of the year ($482m) than it did in all of 2021 ($412m) by the end of Q1 2022.
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“With Africa showing the rest of the world up, now is the right time for investors to get into the African innovation market,” adds Stanford. “The early-stage investment landscape is even more enticing. While the supply of funding is rapidly increasing on an annual basis, there is still a major capital deficit and under-serviced demand. Unlike other markets globally which have become saturated, the African market still represents an opportunity for investors. The investment landscape is less competitive, resulting in more favourable valuations and terms, and thus the opportunity to potentially achieve higher returns.”
“At the core of our business is a desire to elevate the African innovation ecosystem. To achieve this, we must be prepared to back daring founders with the capital and resources they need to generate both scale and value,” Laurent Fayolle, managing director of DotExe Ventures, said.
4Di Capital seed fund 4Di Capital seed fund
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh