Investment

Voltron Capital is set to invest in African startups

African startups to get investments from Voltron Capital

With a history of investments in African startups since 2014, Olumide Soyombo stands as one of Africa’s foremost angel investors. His investment footprints have covered renowned companies like Africa’s unicorn, Paystack, Piggyvest, PushCV, Lemonade Finance, and TeamApt, with a total of about 26 different companies. Partnering with Abe Choi, who leads product and strategy at Simple Dealer, and investment history of over 15+ companies over the years, Olumide has launched Voltron Capital. Voltron Capital aims at investing in over 30 startups, from pre-seed to seed-stage across Africa, and solve the problem of access of impactful early-stage companies to funding for growth. This focus on early-stage startups would be geographically centered around startups in Nigeria, Kenya, South Africa, and North Africa, with funding sizes between $20,000 to $100,000. Voltron Capital is particularly looking at exciting founders in large markets, as these would necessarily mean larger exits, and offer larger multiples in investing early.

Soyombo’s influence on the continent as an angel investor is one that has been particularly fruitful, especially with the success of companies like Paystack and Piggyvest that have received support under him. As a co-founder with Bluechip Technologies, which offers vendor-neutral solutions that bring industry best practices to bear in developing client data management solutions, for banks and TelCos. As a founder-turned-investor, Soyombo is committed to helping African founders to access funding for their ventures, especially at an early stage of growth. Funding for Africa and African ventures is increasing remarkably, with start-ups in Africa now already raising more funding in 2021 than they had in the whole of 2019. With an impressive $167m+ raised through $1m+ deals since July 1st (that’s already more than the $142m raised in the whole of June), the ecosystem has now crossed the $1.3 billion mark. However, a good deal of these initiatives still lacks access to funding in spite of the creativity and novelty of their initiatives and innovations. Part of why this challenge lingers is because of risk-aversion, especially in Africa’s large, fragmented and volatile market. Also, there is the diversity gap that is much evident in VC funding in Africa, especially with a bulk of the funding going to companies that have foreign founders or management. There is a renewed call for funding to be more localized, both in its source as well as in its destination. A lot of local VCs seem not as much interested in funding startups within the ecosystem, possibly because of the huge risks involved in this.

As Soyombo emphasizes, in an interview with Benjamin Dada, there are no good investments; there are only companies you should not have invested in and companies that you should have given more money. What this implies for Soyombo is that there should be greater investments in the African tech ecosystem, and investors should be willing to take on risks in investing in startups. The bigger the risks, the greater the returns. Soyombo is confident that with the greater involvement of Africans in the startup investment landscape, things are bound to change for the better. As such, Voltron Capital will be managed on AngelList and will have investors cutting across a broad range of high-net-worth individuals, bank execs, c-suite execs, and others, with a minimum investment size of $10,000. Aside from access to local investors as LPs, startups will also have access to foreign VCs through the network of American investors of Abe Choi.

As is quoted on TechCrunch, he says,

“Also, as our startups mature, we’ll see people leaving to set up theirs. We want the next wave of African tech success stories to not only make an impact on the continent but to be truly global; through Abe’s strategic connections to the USA, we’re confident we can provide our portfolio with the best possible opportunities to achieve this through our US and global network.”

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