Samurai Incubate Closes $18.6 Million Fund for African Startups

Tokyo-based venture capital firm, Samurai Incubate, has announced the successful closing of its “Samurai Africa 2nd General Partnership” fund. The fund totals 2.026 billion yen, which is equivalent to approximately $18.6 million.

Fund Details and Investors

The fund experienced a significant oversubscription, exceeding its initial target of 2 billion yen (~$18.4 million). A total of 54 investors participated as Limited Partners (LPs).

Toyota Tsusho Corporation is a prominent LP, leveraging its extensive network throughout the African continent. This corporation previously established Mobility 54, a corporate venture capital firm dedicated to investing $45 million in African startups focused on mobility, logistics, and fintech.

Samurai Incubate’s African Investment Journey

Samurai Incubate was founded by Kentaro Sakakibara. The firm initiated its investment activities in Africa in 2018 with the creation of a subsidiary, Leapfrog Ventures.

Through Leapfrog Ventures, Samurai Incubate invested $2.5 million in 20 African startups between August 2018 and June 2019, when the firm was rebranded as Samurai Incubate Africa.

Commitment to Founders

The firm emphasized its dedication to providing value beyond just financial capital. “Throughout our journey, we have focused on refining and optimizing our operating approach to maximize our value proposition to founders,” stated the firm.

They further added, “We believe that the value we bring should extend beyond capital and access to Japanese investors and corporations.”

Portfolio and Investment Strategy

As a sector-agnostic fund, Samurai Incubate Africa has already made investments in 26 companies.

Recent investments from the second fund include:

• Eden Life, a technology-driven home services provider
• Evolve Credit, an online loan marketplace
• Shyft Power Solutions, an energy startup
• FMG, offering microfinance services for car lenders
• Oneport, a freight forwarding company
• Pricepally, an online grocery platform

Expanding Geographic Focus

Initially concentrated on Kenya, Nigeria, and South Africa, Samurai Incubate Africa is now expanding its focus to include Egypt.

Rena Yoneyama, the firm’s managing partner, explained that Egypt’s rapidly growing ecosystem, producing significant talent and investors, made it a logical addition.

The inclusion of Egypt allows Samurai Incubate to invest in the “Big Four” – the leading startup ecosystems on the continent.

Yoneyama stated, “Egyptian startup ecosystem and its economy is rapidly expanding and we got to know that there are many talented founders and great investors in the country as well.” She also confirmed that the firm has already made an investment in an Egyptian startup.

Increased Investment Capacity

Originally, the fund’s ticket size ranged from $50,000 to $500,000, with pre-seed to seed rounds receiving $200,000 or less, and pre-Series A/Series A rounds capped at $500,000.

Following the fund’s completion, Samurai Incubate has increased the maximum investment amount to $800,000.

Yoneyama explained this decision, stating, “We would like to support our portfolio companies’ pre-series A and series A raises as an existing investor. To do so, we thought it would be better to increase the ticket size considering the recent round size and valuation of companies.”

Target Sectors and Future Investments

While sector-agnostic, Samurai Incubate Africa demonstrates a particular interest in companies operating within fintech, insurtech, logistics, healthtech, consumer and commerce, energy, agritech, mobility, and entertainment.

The firm intends to invest in 30 to 40 new companies at the pre-seed and seed stages, alongside follow-on investments in 7 to 10 existing portfolio companies. Samurai Incubate joins other Japanese VC firms, such as Kepple Africa and Uncovered Fund, in actively targeting African startups.