LoftyInc Capital Raises $43 Million to Bridge Funding Gaps for African Startups

LoftyInc Capital, a leading African investment firm, has secured $43 million to expand its support for startups across the continent. This milestone follows a report by VC firm Partech highlighting only a slight dip in Africa’s funding deals and investment volumes over the past year. For over a decade, LoftyInc has been a key player in backing startups at the pre-seed and seed stages.

The firm recently announced the first close of its third fund, LoftyInc Alpha, marking a strategic shift toward late-seed and Series A startups. While broadening its focus, LoftyInc remains committed to its core markets, including Nigeria, Egypt, Kenya, and Francophone Africa. Founder and managing partner Idris Ayo Bello emphasized the firm’s evolving investment strategy.

LoftyInc Alpha's initial close attracted a diverse pool of limited partners, including sovereign wealth funds from the Middle East and Africa, such as Egypt’s MSMEDA and Tunisia’s Anava Fund of Funds. Development finance institutions, including FMO, Proparco (FISEA), AfricaGrow, the International Finance Corporation (IFC), and U.S.-based First Close Partners, also participated, alongside high-net-worth individuals (HNIs) from Africa and family offices from Europe.

Idris Ayo Bello, who launched LoftyInc’s first investment vehicle in 2012, has witnessed Africa’s tech evolution firsthand. His firm has supported startups through various phases, from fintech’s rise to the 2021 unicorn boom and the recent funding slowdown. LoftyInc’s pre-seed vehicle, which began as an angel network, has evolved into a self-sustaining community of over 250 investors across Africa and the diaspora. This foundation led to the firm’s first structured venture fund five years later.

In 2017, LoftyInc raised its inaugural institutional fund, totaling $1.1 million from HNIs, which was fully deployed within Nigeria. Co-founded by Bello alongside Marsha Wulff and Michael Oluwagbemi, the fund delivered an impressive 5.7x DPI (distributions to paid-in capital), driven by successful exits and secondary sales from companies like Flutterwave and Reliance Health, a health tech startup backed by General Atlantic.

By 2021, LoftyInc launched its second VC fund, initially targeting $10 million but closing at $14.2 million. This fund expanded LoftyInc’s reach beyond Nigeria, embracing a pan-African investment strategy in Egypt, South Africa, and Francophone Africa. Among its investors was Meta, which participated through its New Product Experimentation (NPE) team, marking its only African VC fund investment.

With its third fund, LoftyInc aims to address the critical funding gap between seed and Series A rounds. The Partech report highlighted a significant drop in Series A (-18%) and Series B (-27%) ticket sizes last year, underscoring the challenge for startups progressing to later funding stages. LoftyInc’s refined investment strategy seeks to bridge this gap and drive sustainable growth in Africa’s startup ecosystem.