Savannah Fund Launches $25M Africa Startup Fund

Savannah Fund Announces $25 Million Investment for African Startups

Savannah Fund, a prominent pan-African venture capital firm, has revealed the launch of a $25 million fund. This new capital is earmarked to support a greater number of early-stage companies operating across the African continent.

Investment History and Portfolio

Since its inception in 2012, Savannah Fund, under the leadership of Mbwana Alliy and Paul Bragiel, has provided funding to over 30 startups.

Notable investments within their portfolio include:

• FlexClub, a South African car subscription service.
• Sendy, a Kenyan on-demand logistics provider.
• Lidya, a Nigerian fintech company.

Initially, Savannah Fund functioned as an accelerator program in Kenya. Accepted startups participated in three-month cohorts and received funding of up to $30,000.

Transition to Venture Capital

In 2016, the firm transitioned its focus to venture capital investing, concentrating on seed and Series A funding rounds. Investment amounts typically ranged from $25,000 to $500,000.

Fund Details and Key Investors

This represents the second fund established by the nine-year-old, Mauritius-based investment firm. A first close has been secured, led by the International Finance Corporation (IFC), with additional participation from the Women’s Finance Initiative (WeFi).

Other significant investors include Tim Draper, through his venture fund Draper Associates, and Visa Forsten, the co-founder of Tencent-owned Supercell.

Early Investments from the New Fund

According to Alliy, the firm has already invested in seven startups utilizing funds from the first close. This proactive approach is intended to facilitate the completion of fundraising for the entire fund.

“We secured commitments from angel investors and high-net-worth individuals prior to the official fund launch, and these companies were subsequently incorporated into the fund,” Alliy explained. “Demonstrating prior investments made with personal funds often simplifies the process of attracting institutional investors, and we believe we are progressing along that path.”

Focus Areas and Portfolio Companies

These initial seven investments span the firm’s core areas of interest, encompassing fintech, edtech, logistics, e-commerce, SaaS, health tech, and agritech.

Disclosed investments include Aerobotics (South African agritech), FlexClub, Orbit Health (Ethiopian health tech), and Kenyan-based companies Safigen, Moringa School, and Ando Foods.

Geographic Focus and Expansion Plans

While Savannah Fund maintains a presence in Kenya, South Africa, and Tanzania, its primary markets remain Kenya, Nigeria, and South Africa. The managing partner emphasized the firm’s preference for startups capable of scaling operations across multiple African regions – including Rwanda, Ethiopia, and Uganda in East Africa, and Ivory Coast and Ghana in West Africa – as well as globally.

Several portfolio companies have already demonstrated this scalability, with Aerobotics expanding into the U.S., Sendy establishing a strong presence in East Africa, and FlexClub operating in Mexico.

Supporting Ambitious Founders

“We are dedicated to supporting founders who possess the vision to think expansively, and we are committed to assisting them in achieving their goals,” Alliy stated.

Increased Investment Ticket Sizes

The new fund features doubled investment amounts compared to the first, ranging from $50,000 to $1 million. While pre-seed investments may begin at $50,000, typical initial investments are expected to fall between $150,000 and $250,000. Subsequent funding rounds will be contingent on the firm’s role as a lead investor.

Portfolio Performance and Future Growth

In 2020, Savannah Fund’s portfolio companies collectively raised $118 million across Series A, B, and C funding rounds, with some operating in the U.S., Europe, and Latin America. Alliy expressed optimism about surpassing this performance in the current year and expanding the portfolio from 30 to 50 companies.

Empowering Female Founders

The firm recognizes the crucial role of its backer, WeFi, in increasing the number of investments in companies led by female founders.

Entrepreneurs in Residence Program

“Entrepreneurs in Residence, particularly female founders, are integral to our investment strategy, as evidenced by the success of Moringa School, Safigen, and Sendy – all of which have women founders/CEOs who previously collaborated with Savannah as EIRs, Associates & Interns. We are proud to partner with WeFi to further promote and empower female founders across the continent. Even amidst the pandemic, we conducted three internships in 2020, both virtually and in-person in Kenya and Tanzania,” the statement detailed.

The IFC confirmed the investment, stating that it contributed $3 million, while WeFi provided a $500,000 check.

“Early-stage funding is essential to enable more of Africa’s emerging and growing tech founders to scale their businesses and drive the transformation of Africa’s internet economy. By partnering with Savannah Fund, we can help more entrepreneurs access funding,” said Kevin Njiraini, IFC regional director for Southern Africa and Nigeria.

Strengthened Investment Committee and Advisory Board

Savannah’s second fund builds upon its existing network with Stanford University. Steve Ciesinski, former president of SRI International and a guest lecturer in an entrepreneurship course with Alliy, joins the firm’s Investment Committee.

Tommy Chia, a Hong Kong-based investor with an active African portfolio including Paga and OneFi, joins the team as a venture partner. Erik Hersman, co-founder of multiple Kenyan companies, including BRCK, Ushahidi, iHub Nairobi, and Savannah Fund, transitions to a senior advisory role while continuing to lead BRCK.

Bragiel, the firm’s general partner with investments in companies like Unity, Niantic (Pokémon GO), and Zappos, will continue to co-lead the fund with Alliy. Savannah Fund joins other firms like Knife Capital and Uncovered Fund in launching funds dedicated to African startups this year.