P1 Ventures, a prominent Pan-African venture capital firm, has successfully achieved the initial closing of its second fund, securing a substantial $25 million. This substantial capital injection is the result of significant investments from some of Africa’s largest industrial conglomerates, private companies, fund of funds, and general partners from prominent global funds located in the United States and Europe.
Mikael Hajjar, the founder and general partner of P1 Ventures, said that the firm anticipates achieving a final fund close by early next year.
P1 Ventures was originally launched in 2020 by Mikael Hajjar and Hisham Halbouny, who also serves as a general partner. Their first fund, described as a “proof of concept fund,” allocated $11 million to 24 innovative ventures, with a primary focus on sectors such as e-commerce, fintech, insurtech, health tech, and SaaS.
While this second fund represents the firm’s inaugural institutional fund, it will continue to concentrate on these high-potential sectors while introducing artificial intelligence (AI) as a new addition. One of the first investments from this fund is in Nkoloso.ai, a Zambian startup that utilizes satellite imagery and AI to collect and monitor agricultural land data. P1 Ventures has also backed two AI startups and five other portfolio companies from this fund, demonstrating its commitment to advancing technology across Africa.
Read also : Maroc Numeric Fund Announces Its First Investment in Diaspora Startup CyberLeak
Hajjar is a strong advocate for the transformative potential of AI in African markets, particularly in agriculture and fast-moving consumer goods (FMCG). He believes that AI can help Africa leapfrog traditional infrastructure challenges, much like mobile money revolutionized financial services. Furthermore, AI has the capacity to facilitate the development of African products with global reach.
“We believe that AI will be Africa’s next big leapfrog opportunity. So when you think how fintech transformed the continent and allowed it to disrupt the banking sector, we believe AI will do the same with sectors like retail, healthcare, and the creative economy,” said Hajjar.
He emphasized the export potential of AI-driven businesses, citing successful examples like Egypt-born Instabug and BioNTech-subsidiary InstaDeep, which have global customer bases in the U.S. and Europe.
P1 Ventures, with offices in Lagos and Cairo, recently initiated an Entrepreneur In Residence program, with Nkoloso.ai being one of its beneficiaries. Both founders leverage their operational experience to manage this venture studio, which aims to incubate four more startups over the next four years, led by founders capable of achieving product-market fit and scaling their ventures.
Hajjar proudly underlines P1 Ventures’ “contrarian” approach to VC investments in Africa, emphasizing their willingness to support underdog startups and invest in less-explored markets. Their early investments in Francophone Africa markets have paid off, with startups like Yassir in Algeria, Chari in Morocco, and Djamo in the Ivory Coast emerging as the most well-funded startups in their respective countries. Yassir, the firm’s initial investment, has even become one of the most valuable startups in Africa and the Middle East.
Although P1 Ventures primarily focuses on seed-stage investments, it considers itself a multistage investor and occasionally participates in Series A and B rounds when opportunities arise. Hajjar credits their institutional track record and active involvement in helping companies secure follow-on investments, talent, and expansion strategies as key factors in their success.
P1 Ventures’ portfolio includes 29 early-stage investments in 10 countries since its inception, featuring companies like Gameball, an Egyptian software company, and General Atlantic-backed healthtech Reliance Health. The firm’s portfolio companies have managed to secure 35 times more follow-on funding for every dollar invested, a testament to the value it brings beyond capital.
Read also : Egypt’s Lifestyle Startup Glamera Goes FinTech, Secures Saudi Payments License
Hajjar, the first Mauritanian to launch a fund, expressed his commitment to empowering the next generation of African entrepreneurs, backing underdog founders, and nurturing them into regional or global success stories. He envisions P1 Ventures as the premier VC for Africa, drawing parallels to the success of Index Ventures in Europe and Kaszek in Latin America.
Before entering the world of angel investing in 2014 and establishing P1 Ventures in 2021, Hisham Halbouny held positions at Man Capital, a subsidiary of Mansour Group, and EFG Hermes, one of the largest investment banks in MENA. Mikael Hajjar, a Stanford MBA graduate and engineer, gained experience at Google, Zum, and Areva.
In addition to the founders, P1 Ventures benefits from an advisory group composed of experienced investors and operators, including Emil Michael, former chief business officer of Uber, and Bernard Dalle, a founding team member of London-based Index Ventures. Dalle noted, “Innovation across the African continent is booming, and P1 is ideally positioned to help African entrepreneurs at the earliest stages build valuable and enduring businesses.”
In summary, P1 Ventures plans to deploy the newly closed $25 million fund in several strategic ways:
- Investing in Early-Stage Startups: P1 Ventures will continue its focus on early-stage investments, primarily in sectors such as e-commerce, fintech, insurtech, health tech, SaaS, and now, artificial intelligence (AI). The fund will be used to make equity investments in promising startups in these sectors, providing them with the necessary capital to grow and scale their businesses.
- Supporting AI Initiatives: The fund will be used to invest in AI-driven startups and technologies across various industries, including agriculture and fast-moving consumer goods (FMCG). P1 Ventures believes that AI has the potential to transform these sectors in Africa and aims to support startups that leverage AI to address critical challenges.
- Entrepreneur In Residence Program: P1 Ventures has initiated an Entrepreneur In Residence program, and part of the fund will likely be allocated to support and incubate startups through this program. This includes providing funding, mentorship, and resources to early-stage companies led by founders capable of achieving product-market fit and scaling their products.
- Geographical Diversification: The fund will enable P1 Ventures to expand its geographical footprint beyond its current locations in Lagos and Cairo. This may involve identifying and investing in startups in new African markets with untapped potential.
- Follow-On Investments: While P1 Ventures primarily focuses on seed-stage investments, they also engage in Series A and B investments opportunistically. The fund could be used to participate in subsequent funding rounds of portfolio companies, ensuring they have the necessary capital for growth and expansion.
- Value-Added Services: P1 Ventures prides itself on offering more than just capital to its portfolio companies. The fund will be used to provide value-added services, including mentorship, access to networks, and assistance in securing follow-on investments, talent acquisition, and expansion strategies.
- Continued Contrarian Approach: P1 Ventures intends to maintain its contrarian approach to venture capital investment in Africa by identifying and supporting underdog startups and investing in less-explored markets. The fund will enable them to continue this strategy of backing promising but often overlooked ventures.
- Strategic Partnerships: P1 Ventures has a network of advisors and partners, including experienced investors and operators. Part of the fund may be allocated to building and strengthening strategic partnerships that can benefit portfolio companies.
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