African venture capital firm Janngo Capital has closed its second fund at €73 million (about $78 million), 20% more than its initial target of €60 million (about $63 million).
The firm marked the first close of the fund at €26 million in 2022, roping in limited partners such as the African Development Bank Group (AfDB) and European Investment Bank (EIB).
Both anchor investors also participated in the fund’s second close, Janngo Capital’s founder Fatoumata Bâ told TechCrunch. They were joined by other institutional investors, three of which have an African mandate: the Mastercard Foundation Africa Growth Fund, Tunisian fund of funds ANAVA, and the endowment fund of Ghana-based university Ashesi University. The U.S International Development Finance Corporation (DFC) and the World Bank’s International Finance Corporation (IFC) also invested.
Development finance institutions like the DFC and IFC have been instrumental in bolstering Africa’s startup ecosystem by investing in local funds that in turn support early and growth-stage startups. Yet, local institutional investors remain reticent, so efforts by firms like Janngo to bring in local capital helps signal confidence to foreign investors.
“Africa represents 17% of the global population, yet attracts only 1%-2% of global VC funding, a share that has remained stagnant despite growth from $150 million raised a decade ago to around $4 billion-$5 billion today,” Bâ said. “If we believe tech is critical to economic development in Africa, we should have proportional access to VC. That’s why our goal wasn’t just about hitting the target or achieving oversubscription — I wanted to attract private LPs, especially African LPs.”
The firm stylizes itself as a “gender equal” investor, and has so far lived up to its name. Startups founded or led by women — like Nigerian B2B e-commerce platform Sabi, which has a female CEO — make up 56% of Janngo Capital’s portfolio across both funds.
“Our thesis hasn’t changed. We’ve proven it with exits like Expensya, where we were the first VC on their cap table. Also, as a female-founded, female-led, and predominantly female-owned fund, we place high importance on investing in female entrepreneurs,” said Bâ.
“This focus is important because, while Africa has the world’s highest rate of female entrepreneurship, only a tiny share of global VC funding flows to female founders. So, showing that a high-impact thesis—directing capital to diverse founders, early-stage VC, and sectors beyond fintech—can deliver was essential for us.”
When it marked this fund’s first close two years ago, Janngo Capital initially planned to back 25 companies. But now that the additional funds are in, the firm will invest in another 10 to 15 companies over the next five years, Bâ said. The firm expects its portfolio to have between 25 and 40 companies, and the second fund will not depart from the firm’s seed to Series B focus. The VC takes 15% to 30% ownership in startups.
Since launching its first fund in 2018, Janngo has made more than 30 investments in 21 startups, sometimes investing in follow-on Series B rounds. Its first fund had about $10 million, and it seeded 11 companies, including Expensya and Sabi. The firm doubled down in both startups’ Series B rounds with its second fund.
Expensya and Sabi stand out as flagship successes for Janngo Capital owing to the former’s ~$120 million exit to Swedish software company Medius (giving the firm a 48% IRR) and the $1 billion in gross merchandise volume generated annually by the latter.
Expensya’s exit is noteworthy as it ranks amongst the top disclosed acquisitions from Africa. It also speaks to Janngo Capital’s “conviction-led” investing (as the first African VC on the startup’s cap table), which is coming in handy given the current climate, where many local VC firms are increasingly turning to partial exits or secondaries to provide liquidity amid challenging fundraising conditions.
“It’s really important for us to show that exits are happening sooner rather than later in our journey, especially compared to some peers I respect greatly who are still working toward exits,” Bâ. “Still, the true measure of our success will be where we stand in 10 years once the fund is fully deployed.”
Janngo invests €150,000 to €5 million in startups operating in the healthcare, logistics, financial services, retail, agritech, mobility, and the creator economy sectors. The firm also has offices in Abidjan, Mauritius, Tunis and Paris.
