Overview

LoftyInc Capital Management is an early-stage Africa focused venture capital firm with the goal of helping young Africans turn lofty ideas into global corporations that create high-impact jobs and transcend economic development challenges. 

Based on research, we saw a growth trend in our members and a readiness to invest in more sophisticated investment opportunities. As a result, we partnered with LoftyInc Capital Management to curate multiple educational webinars and create a syndicate of investors

100 members joined the syndicate to launch the VC club and invested $755,000 in the LoftyInc Afropreneur Fund 3 (LAF3).

The VC club syndicate is a lead Limited Partner (LPs) in LAF3.

Members of the VC Club get quarterly updates on the performance of the fund and so far, the fund has invested in 50 start-ups in Africa.

Investment Thesis

The spotlight has been on African start-ups for a while now. In 2021, according to The Big Deal (a website that tracks data on VC activities in Africa), start-ups in Africa received a total of $4.33billion in 820 investment deals. This was 155% more than the $1.65million raised in 2020. In the first half of 2022 $3.1bn was invested in African starts-up. This happened even though global venture capital funding declined by 20% to $39bn in the first quarter of 2022.

The co-founder of The Big Deal, Maxime Bayen, attributes the rise in VC investing in Africa to the fact that start-ups in Africa proffer solutions to the major needs in the continent and have strong traction in terms of revenue.

At Twelve, we understand that VC investing is risky and long term. This informed our decision to approach VC investing by working with a well-established VC firm with good precedence. LoftyInc has a track record of investing in successful start-ups, with investment in over 60 start-ups and 3 exits from start-ups such as Andela and Flutterwave that are recognized as unicorns. LoftyInc has a mission to build an ecosystem of Africans investing in Africans solving African problems.

Investment Outcome

In December 2021, LAF3 did a partial exit by selling its 70% stake in a start-up based on Ghana. The exit gave a return of 8x within 6 months of investing.

Venture capital investing, though risky, is one of the few assets that provides good long-term returns. At exit from LAF3, we expect that the return on investment will contribute significantly to the growth of the investment portfolios of members of the VC syndicate.