Africa-focused venture capital firm TLcom Capital has appointed Eloho Omame as a partner six months after announcing the first close of TIDE Africa Fund II, its $150 million second fund (it expects to reach a second close later this year, according to its partners). appoints
TLcom Capital is known for investing from seed to Series B. Some of the deals from its portfolio in this category include uLesson, Ajua, Ilara Health, Kobo360 and Twiga. However, the venture capital firm has been flexible with its deal-making processes, registering a few later stages deals in Andela’s Series C and much earlier stages like Autochek’s pre-seed deal.
Taking a more proactive approach, the firm, which has offices in Lagos, London and Nairobi, intends to place more emphasis on the pre-seed stage and Omame’s appointment is critical to this objective. She is the co-founder and general partner of FirstCheck Africa, an early-stage firm that invests in pre-seed and seed-stage startups with at least one female founder or co-founder. Before FirstCheck Africa, Omame was the founding managing director of Endeavor Nigeria, leading a community of high-impact founders on the continent.
It’s still very early in the African tech ecosystem. However, some say it reached an inflection point last year as startups received over $5 billion in venture capital funding. Though foreign capital from global investors in the U.S. and Europe has driven much of this growth, local and Africa-focused investors are pulling their weights, raising small to medium-sized funds to support innovation.
Only a handful of these firms have an arsenal of over $100 million to deploy in Africa and they have typically made bets from seed to Series C for years. But firms like TLcom Capital are increasing their appetite for much earlier deals—it’s identical to how firms that back IPO-ready companies such as Tiger Global and Softbank move for seed deals as valuations of later-stage companies take a beating and IPO stalls.
TLcom Capital realizes that to access or generate deal flow, it needs to catch founders early in their journies. And from a diversity perspective, the firm is also keen on backing more female-led companies at this stage (an example is its sole investment in Okra’s $1 million pre-seed round). According to partner Ido Sum, the Africa-focused firm is dedicating “a few million dollars” from its fund to these two early-stage strategies. The first is to back gender-neutral startups early with small check sizes and a low-touch approach and create a pipeline to later stages. The other is a $2 million co-investment commitment for female-led startups at the pre-seed stage, managed by FirstCheck Africa.
Omame’s background and hands-on experience are suited to handle these strategies, said the partners. “We’re doing this not to alter our investment strategy, but to make sure that our deal flow generation strategy covers all the possibilities,” commented Maurizio Caio, the general partner at TLcom Capital, during a TechCrunch interview with the partners. “We chose Eloho because when we interacted with her on different occasions, her background and way of thinking about entrepreneurs made her a great fit.”
On the call, Omame said she hopes to embed herself more deeply into Africa’s startup ecosystem even as she shares her time between the firms. As a TLcom partner, Omame will be responsible for following entrepreneurs early in their journeys (specifically at pre-seed) through later stages. As a general partner at FirstCheck Africa, she is charge of investing a total of $12 million (the firm’s $10 million debut fund and $2 million commitment from TLcom) as a single pool of capital into female-led startups in Africa.
A debut fund of $10 million is an ambitious pursuit considering FirstCheck Africa only launched last January. It’s unclear where the firm is currently in its fundraising journey but the VC firm—led by Omame and Odunayo Eweniyi, the co-founder and COO of Piggyvest, a Nigerian fintech startup—has made impressive progress with resources at its disposal. So far, it has backed eight startups, most of which have at least one female founder—and others with female CEOs like Jumba and Healthtracka.
Omame, who has always been vocal about female representation in the startup and VC worlds, said FirstCheck Africa’s co-investment opportunity with TLcom is exciting for female founders. Less than 1% of all VC dollars went toward startups with one or more women founders last year, according to The Big Deal, which details investments in Africa. From the female founders’ perspective, they benefit from a female-first investor committed to their long-term success plus more capital than would have been made available under its initial target.
“TLcom runs the most credible, super well attended and organized female founder summit every year,” said Omame referencing the pan-African VC’s summit for female founders. “So there’s always been that commitment and in my view, what’s happening here is how the firm wants to step that up a notch. Part of that is in committing actual and meaningful amounts of capital to be co-invested by FirstCheck Africa and saying how do we then connect that to a broader pipeline and strategies around the ecosystem as a whole? So in many ways, there’s lots of synergy happening here.”
More from the gender-lens perspective, TLcom Capital is one of the very few VC firms with more female partners on the team. With the new addition, TLcom’s senior leadership is now 60% female (Eloho, Omobola Johnson and Andreata Muforo).
Eloho’s track record in early-stage investing will prove vital as TLcom plans to expand its current portfolio from 13 companies to 30 with ticket sizes ranging from $500,000 to $15 million. The firm, which has made most of its investments in West and East Africa (Nigeria and Kenya to be precise), also intends to start backing companies in North Africa.
FirstCheck Africa, on the other hand, can now make more investments due to this co-investment plan. The firm—which manages both pools of capital and makes all the investment decisions—plans to invest up to $250,000, including follow-ons largely tied to TLcom Capital’s deal flow. “We’re allocating this pool and intend to generate a fairly wide pipeline in terms of a spectrum of business models,” said Sum. “I also think we are fully aligned on the sectors and verticals we would like to support for follow-on rounds.”
Source: Tech Crunch