The well-deserved applause Africa’s startup funding receives hides a crucial aspect of the ecosystem: the need to frequently look outside of Africa for funding. Foreign VCs describe the excitement in their minds as they are eager to invest in the emerging digital companies that are spread around Nairobi, Lagos, Cape Town, Cairo and other locations.
Capital is moving around at historic rates due to economic realities and the low interest rates in the West, and VCs are continuously looking for new opportunities to invest. Local funders are however lacking from this excitement. And because they frequently place the first bet on promising early-stage startups, a thriving local investment community is essential to the health of Africa’s expanding digital economy. 4Di Capital’s desire to support early growth African startups has now been boosted after the VC firms closed a seed round of $25M.
Independent seed-stage venture capital firm 4Di Capital supports, mentors, and invests in the technology sector. It offers early- and growth-funding stages and focuses on high-growth technological venture ideas. Offices for the fund manager are located in Atlanta, Georgia, and Cape Town, South Africa. Based in Rondebosch, South Africa, the business was established in 2009.
“Nurture capital is the term that best describes 4Di Capital’s purpose and philosophy,” as noted by the VC.” We understand that in the early days of any business, support, mentoring and access to networks is just as important as seed capital.
Using tried and tested international venture capital best practices, adapted for local use, we believe in agile entrepreneur-friendly finance without frills and in working as a team with our investees to achieve their true potential. We look for founder teams with hungry passion, commitment, domain expertise and deep insights into the large market problems they wish to solve with their technology solutions.”
The latest seed round was launched in partnership with DotExe Ventures in Mauritius – with an undisclosed raise from Mauritian-based conglomerate IBL Group, via its investment vehicle, IBL Link Investments Ltd.
According to Justin Stanford, partner at 4Di Capital, one significant aspect of our firm’s approach is that it likes to have fewer investors and work very closely with them, optimizing value-add and providing a deep look at the coalface. He added that H4Di was thrilled to have added IBL Group and IBL Link Investments Ltd to its list of investors.
The majority of startups in Africa today are in the early stages of development. Early-stage businesses received 64% of Africa’s 359 startup investment rounds above $200,000 in 2020, or $220 million out of the $1.4 billion invested in startups on the continent, according to Partech, a global VC. The advantages of increasing domestic investment in African businesses cannot be overstated. With the most recent fundraising, 4Di Capital can assume some funding responsibilities within the startup ecosystem in South Africa.