P1 Ventures, a Pan-African venture capital firm, has announced the first close of its second fund, raising $25 million. The firm attracted capital from some of Africa’s largest conglomerates and private companies, as well as fund of funds and general partners of global funds based in the U.S. and Europe. P1 Ventures plans to achieve a final close by early next year, according to founder and general partner Mikael Hajjar.
Key Takeaway
P1 Ventures has reached the first close of its second fund, raising $25 million from a variety of sources. The firm plans to expand its investment focus to include artificial intelligence (AI) and believes that AI presents a significant opportunity for Africa to develop globally competitive products. P1 Ventures takes a contrarian approach to venture capital investment, backing underdog founders and investing in startups operating in untapped markets. The firm has a strong track record and adds value beyond capital to its portfolio companies.
Expanding Investment Focus
With its second fund, P1 Ventures will continue to focus on sectors such as e-commerce, fintech, insurtech, health tech, and SaaS. However, the firm is also adding artificial intelligence (AI) to its investment mix. It has already made its first AI investment in Zambian startup Nkoloso.ai, which utilizes satellite imagery and AI to gather data and monitor agricultural land. P1 Ventures believes that AI presents a significant opportunity for Africa to leverage emerging technologies and develop globally competitive products.
Africa’s Next Leapfrog Opportunity
P1 Ventures sees AI as Africa’s next leapfrog opportunity, similar to how fintech transformed the continent’s banking sector. The firm believes that AI has the potential to revolutionize industries such as retail, healthcare, and the creative economy. By exporting AI-driven products and services, African companies can overcome challenges such as market limitations and currency risks. P1 Ventures points to successful African-founded AI businesses like Instabug and InstaDeep, which have customers globally, as examples of AI’s export potential.
A Contrarian Approach to VC Investment
P1 Ventures takes pride in its contrarian approach to venture capital investment in Africa. The firm actively seeks out opportunities where others may not invest and backs underdog founders. It has made early investments in startups operating in Francophone Africa markets, including mobility startup Yassir, e-commerce platform Chari, and payments startup Djamo. These startups have emerged as some of the most well-funded in their respective countries. P1 Ventures also participates opportunistically in Series A and B investments.
Strong Track Record and Value Beyond Capital
P1 Ventures attributes its success to its partners’ institutional track record and their ability to identify and support category-defining businesses. The firm’s portfolio companies have, on average, secured 35 times more follow-on capital for every dollar invested by P1 Ventures. This metric reflects the value that the firm adds beyond capital, including its partners’ expertise across multiple stages and sectors and their extensive networks in the U.S., Europe, and Asia.
