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Constant Ventures launches $100m venture capital fund for tech startups across West Africa

Constant Ventures, a part of the Constant Group is raising a $100m venture capital fund to invest across a range of technology startups with a focus on financial inclusion, education and healthcare.

Investee companies will initially be located across Nigeria and Ghana, with the fund set to target the wider West Africa region.

Recent advances in digital information technology provide an opportunity to both build and scale solutions to everyday challenges faced by millions of Africans in particular, the aggregation of fragmented value chains, the formalisation of large sectors of the continent s economy and the provision of much-needed access to financial services for both consumers and businesses.

The Constant Ventures fund has a unique structure that enables investment either directly in talented entrepreneurs and compelling startups across West Africa or through its proprietary venture studio, which serves as a catalyst to combine best-in-class entrepreneurs, ideas and capital to quickly build winning startups.

Constant Ventures created the fund on the back of its successful track record as an angel investor, as well as a respected developer of technology businesses. To date, it has invested US$3.2m in nine Nigerian startups, with a return of 5.6x, which is projected to return 15x after the next funding round. Ike Echeruo, chairman of the Constant Group and co-founder and managing partner of Constant Ventures, says: We are very excited to be announcing this fund. It has been a decade in the making, the result of deep-dive research and due diligence in anticipation of this moment when we knew that advances in information technology would enable start-ups across West Africa to commercially address real societal needs.

Technology was always going to provide the answer to so many of the critical issues faced by millions of people across Africa today. We are now on the cusp of a paradigm shift with recent advances across information technology presenting a unique investment window. We have looked at what has worked in other geographies. Now, refined and optimised for Africa, we have modelled a fund to invest in businesses that will both improve the lives of millions of people and deliver outstanding returns for investors.

Group 94 (1)

Constant Ventures is offering up to $15m venture fund for West African startups

Financial Services Monitor Worldwide (English) – Wire

An African-led venture capital firm, Constant Ventures focused on catalysing growth in Africas largest economy, is launching a $100 million venture capital investment fund for digital firms with a focus on financial inclusion, education, and healthcare.

From assisting to establish firms in its venture studio to participating in pre-seed through Series A rounds, Capital Ventures has been an angel investor in African entrepreneurs and a supporter of the African technological ecosystems development.

So far, Capital Ventures has invested over US$3.2 million in nine Nigerian start-ups including Halo, Gokada, Appzone, Tingtel, Heala, Sabiroa, CreditClan, FIG. and Omnibiz yielding a 5.6x return and a 15x return following the next round of funding.

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VC Spotlight: Constant Ventures looks to deploy USD 100m West Africa focused fund in five years

Mergermarket

Constant Ventures, a Lagos, Nigeria-based VC firm, is looking to fully deploy its USD 100m fund within five years, founder and Managing Partner Ike Echeruo told Mergermarket.

The firm has engaged advisers on several levels to assist with the fundraising process, and is also ready to work with other advisers representing potential investors, Echeruo said.

The firm has initiated conversations with potential investors, receiving “very strong indications of interest”, and expects to reach a closing within six to 12 months from now, he said, noting that the targeted investors include development financial institutions (DFIs), global institutional investors and family offices.

The fund has a ten-year lifecycle and will invest in pre-seed, seed and Series A financing rounds by financial services, marketplace and platform start-ups, Echeruo said. It has “a strong pipeline” of deals, he said, and will deploy funds immediately after the fundraising.

To date, Constant Ventures has made nine investments in Nigeria worth a total of USD 3.4m, and will continue to invest while raising the fund’s capital, he noted.

Echeruo and his brother Chinedu Echeruo are the fund’s general partners and investors, he said. They are also the founders of Constant Capital, an investment bank which has arranged morethan USD 3bn in transactions across West Africa to date, according to a presentation shared with this news service.

Constant Ventures will also participate in portfolio companies’ follow-on rounds, Echeruo said.

The new fund will invest in around 76 companies across West Africa, primarily in Nigeria and Ghana. This includes five investments in Series A rounds, each with an average ticket of USD 15m.

Two of the portfolio companies will execute “key expansion capital raises” in the next three to six months, which Constant Ventures is “well positioned” to lead, according to the presentation.

One of the planned investments is the upcoming financing round of Appzone, which offers a blockchain-powered, decentralised interbank payment network, Echeruo said, declining to elaborate.

In April 2021, Appzone raised a USD 10m Series A round led by local VC firm Cardinal Stone Capital.

The fund’s exits are expected through trade sale, IPOs or private market transactions, Echeruo said.

Constant Ventures charges 2% management fees and investors can expect a 5-10x return on their investments, per the presentation.

Financial services start-ups include companies building products or infrastructure that extends access to credit, savings and investments or digital payment products to previously underserved populations. Platforms and marketplaces are companies operating in large, fragmented value chains, which are aggregating suppliers/sellers and matching them with demand/buyers, as well as providing access to financial services, also according to the presentation.

Five years ago, African startups pulled in about $420 million in investment from venture capitalists, according to PitchBook data. That number increased to more than $2.2 billion in 2021, a record-setting year for deal value and deal count for the continent

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New Fund Aims to Invest in African Tech Startups

THE WALL STREET JOURNAL

Good day. A new venture fund is looking to capitalize on Africa’s young and increasingly urban population, the continent’s fast growth in smartphone use and the lack of access to financial services.

Constant Ventures, an arm of pan-African investment banking firm Constant Capital, is targeting $100 million for a venture fund to invest in tech-enabled companies focused on fintech, health and education. The fund will focus on West Africa, primarily Nigeria and Ghana.

It plans to attract capital from family offices and institutional investors.

The firm, based in Lagos, Nigeria, expects the check sizes written from the fund to range from $500,000 to $1 million, said Ike Echeruo, managing partner for Constant Ventures. Mr. Echeruo co-founded the company alongside his brother Chinedu Echeruo, a serial entrepreneur.

Ike Echeruo said fintech startups can help Nigerians access consumer credit to make it easier to rent an apartment or buy a washing machine. “The opportunity is immense,” he added. “It’s an opportunity that is sometimes difficult for people who live in developed markets to appreciate.”

Five years ago, African startups pulled in about $420 million in investment from venture capitalists, according to PitchBook data. That number increased to more than $2.2 billion in 2021, a record-setting year for deal value and deal count for the continent

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Venture Fund to Raise $100 Million For West African Start-Ups

Bloomberg

Constant Ventures is raising a $100 million fund to invest in tech-based companies in West Africa as it seeks to expand in the region.

The Nigerian-based venture capital firm will start the fund within the next six months by investing its own money into the pool while seeking additional equity contribution from partners over the next 12 months, according to the company. The fund targets start-ups in technology-based services including health, education and financial inclusion in West Africa.

“We believe that digital technology is going to have a transformative effect on growth and wealth in Africa and it’s going to empower millions of people by providing them access to finance and access to basic infrastructure,” Ike Echeruo, chief executive officer for Constant Capital Group, the parent company, said in a virtual interview. The company expects development-finance institutions, institutional investors and high net-worth individuals as co-investors in the $100 million fund, he said.

Constant Capital was co-founded by Echeruo in 2006 and it later expanded to Ghana. It had in the past invested in companies including Appzone, a payments-services provider, and Heala, a health-technology firm and is looking to do more, according to Echeruo.

Last month, Norrsken22, an Africa-focused fund said it expects to raise $200 million or more this year to invest in fintech, taking advantage of the continent’s fast-growing startup sector, which raised a record $5 billion in 2021. “We invest in very early stages in founders that are doing business that we think will win,” as well as in firms that plan to grow, Echeruo said, dismissing concerns about excessive valuations in the sector.

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$100 million fund to invest in tech startups innovating to meet the needs of millions of Africans 

CONSTANT VENTURES

$100 million venture capital fund for investment into technology start-ups
across West Africa

Focus on marketplace platforms, as well as finance, healthcare and education initiatives

Target ROI of 5-10x invested capital

Constant Ventures, a part of the Constant Group (www.constantafrica.com) is raising a $100 million venture capital fund to invest across a range of technology start-ups with a focus on financial inclusion, education and healthcare. Investee companies will initially be located across Nigeria and Ghana, with the fund set to target the wider West Africa region.

Recent advances in digital information technology provide an opportunity to both build and scale solutions to everyday challenges faced by millions of Africans – in particular, the aggregation of fragmented value chains, the formalisation of large sectors of the continent’s economy and the provision of much-needed access to financial services for both consumers and businesses.

The Constant Ventures fund has a unique structure that enables investment either directly in talented entrepreneurs and compelling start-ups across West Africa or through its proprietary venture studio, which serves as a catalyst to combine best-in-class entrepreneurs, ideas and capital to quickly build winning start-ups.

Constant Ventures created the fund on the back of its successful track record as an angel investor, as well as a respected developer of technology businesses. To-date, it has invested US$3.2 million in nine Nigerian start-ups*, with a return of 5.6x, which is projected to return 15x after the next funding round.

Ike Echeruo, Chairman of the Constant Group and co-founder and Managing Partner of Constant Ventures, says:

“We are very excited to be announcing this fund today. It has been a decade in the making, the result of deep-dive research and due diligence in anticipation of this moment when we knew that advances in information technology would enable start-ups across West Africa to commercially address real societal needs.

“Technology was always going to provide the answer to so many of the critical issues faced by millions of people across Africa today. We are now on the cusp of a paradigm shift with recent advances across information technology presenting a unique investment window. We have looked at what has worked in other geographies. Now, refined and optimised for Africa, we have modelled a fund to invest in businesses that will both improve the lives of millions of people and deliver outstanding returns for investors.”

*Gokada, Halo, Appzone, Heala, Tingtel, CreditClan, Omnibiz, Sabiroad and FIG

Enquiries:

Constant Ventures
Ike Echeruo Tel: +44 7498 521909
Meredith Ogilvie-Thompson Tel: +1 347 268 8899

Hudson Sandler
Mark Garraway Tel: +44 7771 860938
Maria Shiryaevskaya Tel: +44 7939 200110

Notes to editors:
The Constant Group was founded in 2006 and today comprises two divisions Constant Capital and Constant Ventures with a combined total of 40 professionals.

Constant Capital, a West African merchant bank has – to-date – arranged more than US$3 billion for various Nigerian institutions, including international money earmarked for local banks that was raised from both international banks and global hedge funds.

Constant Ventures was established to provide capital to a portfolio of tech-enabled companies across the fintech, healthcare and logistics sectors. It has to date invested approximately $3.2 million in nine companies and is projecting a 15x return after the next funding round.