Pan-African venture capital firm Janngo Capital has closed its oversubscribed second fund at €73 million ($78 million), 20% more than its target of €60 million (~$63 million). In 2022, Janngo Capital reached the first close of its second fund at €26 million, receiving capital from several limited partners, including the African Development Bank Group (AfDB) and European Investment Bank (EIB).
Both anchor investors also participated in the fund’s second and final close, founder and executive chair Fatoumata Bâ told TechCrunch in an interview. They are joined by other institutional investors, including three with an African mandate: the Mastercard Foundation Africa Growth Fund, Tunisian fund of funds ANAVA and the endowment fund of Ghana-based non-profit university Ashesi University.
The U.S International Development Finance Corporation (DFC) and the World Bank’s International Finance Corporation (IFC) are also limited partners in Janngo Capital’s second fund.
Development finance institutions like the DFC and IFC have been instrumental in building Africa’s startup ecosystem by investing in local funds that support early and growth-stage startups. Yet, participation from local institutional investors, such as hedge funds, mutual funds, pension funds, and endowments, remains limited. As such, efforts by firms like Janngo to bring in local capital not only signal confidence to foreign investors but also prop the continent’s tech ecosystem.
“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 $4-5 billion today,” Bâ stated. “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.”
Generating returns for LPs
Venture capital firms must demonstrate commercial successes—through metrics like DPI, IRR, and MOIC—to get more local institutional capital involved in the asset class. And Janngo Capital is proving it can do just that. The firm currently records an IRR of 48% from last year’s exit of the Tunisian expense management platform Expensya to Medius, a provider of accounts payable (AP) automation.
At the same time, the “gender-equality” firm, whose thesis revolves around generating solid returns and creating impact via its investments, is setting standards in the latter by backing more female-founded or female-led startups than the average African VC firm. Such startups like the Nigerian B2B e-commerce platform Sabi, which has a female CEO, make up 56% of Janngo Capital’s current 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.”
Similarly and still on diversity, 67% of the firm’s portfolio companies are from French-speaking Africa. Expensya, Moroccan agritech YoLa Fresh and Ivorian fintech Djamo are a few examples.
African product, global market: Expensya employees cashed out $10M from 2023 acquisitio
Backing winners early
Janngo Capital’s initial plan after its first close two years ago was to back 25 companies. However, given the additional capital raised, the fund — which takes 15-30% ownership in startups — will expand that target by investing in another 10-15 companies over the next five years, Bâ notes. So, Jaango Capital expects its portfolio to land between 25 and 40 companies, with the second fund having a similar Seed-to-Series B thesis as the first.
Since launching its first fund in 2018, Janngo Capital has made 30+ investments in 21 startups across both funds, sometimes investing in follow-on Series B rounds. Its first fund, about $10 million large, seeded 11 companies, including Expensya and Sabi. Jaango Capital doubled down in both startups’ Series B rounds from its second fund.
African B2B e-commerce startup Sabi tops $300M valuation in new funding
Janngo Capital’s check size ranges between €150,000 to €5 million in startups operating across healthcare, logistics, financial services, retail, agritech, mobility, and the creator economy sectors. With offices in Abidjan, Mauritius, Tunis, and Paris, the firm houses a team of operating partners skilled in tech, sales, marketing, and ESG to support its portfolio companies. This operational approach reflects founder Fatoumata Bâ’s background, having held executive and managerial roles at the African e-commerce company Jumia.
“We are incredibly hands-on in helping our portfolio companies if and when they need it, to get to product market fit, build the MVP when it’s in seed stage, hyper, grow or expand to new markets,” Bâ explained. “And I think this is the additional thing that is helping us derisk or improve the risk-return profile of our fund and have this exit as early as you can see.”
Expensya and Sabi stand out as flagship successes for Janngo Capital owing to the former’s ~$120 million acquisitio 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” dealmaking process (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 for whom I have a lot of respect for still working toward their first full exits,” Bâ. “But beyond our fund target, of course, what will matter is how well we are doing in 10 years when the firm is fully deployed.”