TLcom Capital closes $154 million fund for early-stage African startups

TLcom Capital, a Nairobi-based VC firm that has backed startups like Vendease, Seamless HR, and uLesson, has reached a final close for TIDE Africa II, a $154 million fund focused on early-stage startups. The fund reached the first close of $70 million in January 2022 and was expected to hit a second close by the end of that year.

It took over two years to reach and surpass the funding target. Maurizio Caio, founder and managing partner at TLcom Capital, said the delay was because they received large investments requiring some documentation adjustments.

TIDE Africa II is roughly two times the size of TLcom’s first fund ($71 million), which closed in February 2021.

Startup funding in Africa has slowed since 2022 as global venture capital appetite declined. In 2023, African startups raised $3.2 billion, the lowest figure since the $2.1 billion in 2020. As foreign capital gradually disappeared from the ecosystem, led by the exodus of 400 unique investors, local venture capital firms like TLcom have stepped up.

The VC firm starts investing at the seed stage or Series A and follow-up capital for portfolio companies that have reached their growth stages.

“The $1 to $3 million range is the range of our first check,” Caio said.

TLcom Capital also plans to fund female-founded tech startups. With a commitment of $2 million, TLcom was an early investor in FirstCheck Africa, a female-focused pre-seed fund launched in January 2021.

The company’s ambition is to show the global VC market in the next three to five years that the African tech ecosystem can bring in great returns. It is targeting investments in 20-25 startups.

“We are maintaining the same investment strategy for TIDE Africa Fund II as we had for our first fund, which made over 80% of its investments at Seed or Series A,” Caio said.

Investors in the TIDE Africa Fund II include the European Investment Bank (EIB), Allianz, DEG Impact’s joint venture, AfricaGrow, Visa Foundation, and Bertelsmann.

Apart from expanding to Egypt and South Africa, the new fund enables TLcom to partner with African founders to tackle the continent’s biggest and most complex challenges with innovative solutions.

TIDE Africa Fund II has already been deployed in South Africa and Egypt with Cape Town-based LittleFish, a software company enabling payment and banking products for retail-focused SMBs, and Cairo-based ILLA, a middle-mile logistics company.