Black Ostrich Ventures, a US-based firm, has recently secured a $20 million fund aimed at supporting African startups in the cleantech, supply chain, agritech, and edtech sectors. The fund will focus on pre-seed and seed stage investments, specifically targeting startups in African countries with lower revenue opportunities, such as Tanzania, Zambia, Morocco, and Uganda.
This approach deviates from the norm of concentrating on the dominant markets of Nigeria, Kenya, Egypt, and South Africa. These “Big Four” markets accounted for a substantial 92.13% of the total investment raised in Africa during the initial half of 2023, as indicated by an analysis by BD Funding Tracker.
This is a strategic move by the newly created firm. Ajani Windsor-Areago, the General Partner of Black Ostrich Ventures, explained the decision’s rationale to TechCabal. He noted that they believe there’s untapped potential in terms of exits and deal activities in these countries.
Windsor-Areago pointed out that the common focus on the “Big Four” countries—Nigeria, South Africa, Egypt, and Kenya—when it comes to capital inflows into venture capital in Africa doesn’t necessarily align with where most exits actually occur.
Briter Bridges’ data supports this perspective by revealing that countries like Tanzania and Zambia, which receive significantly less funding compared to the “Big 4,” still offer viable opportunities for successful exits.
Black Ostrich Ventures aims to focus its investments on businesses and countries with promising opportunities for profitable exits. The company intends to capitalize on Windsor-Areago’s extensive experience in the venture capital industry.
Windsor-Areago, who previously held the position of Head of North America at Lagos-based Platform Capital and more recently served as a Venture Partner at Expert Dojo, a US-based early-stage fund, brings valuable expertise to the firm. Currently, he holds advisory roles in eight startups globally, including Cpayant in the UK, ESGentle in San Francisco, Hytribe in Uganda, and Wayli in Morocco.
In addition to providing initial funding, Black Ostrich Ventures plans to offer follow-on investments of up to $1 million for companies that progress to the Series A stage. The company’s support for African startups goes beyond financial backing.
Windsor-Areago envisions a unique approach to working with founders. He emphasises the firm’s intention to provide comprehensive assistance by connecting founders with growth and marketing experts. This strategic support acknowledges that while initiating a business is essential, comprehending the marketing facet of the business holds equal significance, as stated by Windsor-Areago.