TLcom Capital, a Nairobi-based venture capital firm renowned for its backing of startups such as Vendease, Seamless HR, and uLesson, has recently concluded its fundraising efforts for TIDE Africa II, securing an impressive $154 million. This fund, primarily aimed at early-stage startups, experienced a protracted journey to surpass its initial target, taking over two years to achieve its final close. Maurizio Caio, founder and managing partner at TLcom Capital, attributed this delay to the necessity of accommodating substantial investments, which entailed certain adjustments in documentation.
TIDE Africa II marks a significant milestone for TLcom, being approximately double the size of its predecessor, TLcom’s first fund, which closed at $71 million in February 2021. This success comes at a time when startup funding across Africa has faced a slowdown, reflective of the global decline in venture capital interest. In 2023, African startups only managed to raise $3.2 billion, the lowest figure since 2020, with the departure of 400 unique investors from the ecosystem contributing to this decline. In response, local venture capital firms like TLcom have taken on a more prominent role in sustaining the continent’s entrepreneurial landscape.
TLcom Capital's investment approach typically targets startups at the seed stage or Series A, with initial checks ranging between $1 to $3 million. Additionally, the firm has committed $2 million to supporting female-founded tech startups, exemplified by its early investment in FirstCheck Africa, a pre-seed fund with a focus on female entrepreneurs.
With ambitions to showcase the African tech ecosystem's potential for robust returns, TLcom Capital intends to invest in 20-25 startups through TIDE Africa Fund II, maintaining a strategy similar to its first fund, which saw over 80% of its investments at Seed or Series A stages. Noteworthy investors in TIDE Africa Fund II include the European Investment Bank (EIB), Allianz, DEG Impact’s joint venture, AfricaGrow, Visa Foundation, and Bertelsmann.
Moreover, the new fund's expansion to Egypt and South Africa positions TLcom to collaborate with African founders in addressing the continent's most pressing challenges through innovative solutions. Already, TIDE Africa Fund II has been deployed in South Africa and Egypt, supporting startups like LittleFish in Cape Town, a software company facilitating payment and banking solutions for retail-focused SMBs, and ILLA in Cairo, a middle-mile logistics company.
Maurizio Caio emphasized TLcom's commitment to fostering innovation and entrepreneurship across Africa, stating, "We are maintaining the same investment strategy for TIDE Africa Fund II as we had for our first fund." This commitment, coupled with the backing of prominent investors and the firm's expansion efforts, underscores TLcom Capital's pivotal role in driving Africa's tech ecosystem forward.
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