US-based and pan-African VC fund P1 Ventures has completed the second close of its second fund at $35 million, aiming to reach $50 million by the final close.
The fund welcomes the World Bank’s International Finance Corporation (IFC) as its first public institutional investor. It’s also expanded its in-house data science team to further leverage AI in its sourcing for dealflow and talent.
Mikael Hajjar, P1 Ventures co-founder and managing partner, said: “We’ve decided to allocate meaningful resources to building our in-house data science tools and processes that will augment our investment team by sourcing and screening more programmatically. As far as we know, no firm has built anything like that in Africa yet, and we believe this will help us pick up a signal from the noise by focusing on a few themes, such as repeat founders. We can also leverage these tools to create more value for our portfolio companies.”
Founded in 2020, P1 Ventures is a high-conviction investor on a mission to back Africa’s best entrepreneurs, thus plugging the capital gap facing African startups. While 90% of foreign funding centres around Africa’s Big 4—Kenya, Nigeria, Egypt, and South Africa—P1 has a database of African entrepreneurial talent flowing from all corners of the continent.
When the global VC market began shrinking in 2023, causing foreign funding in Africa to drop by 43%, P1 Ventures bucked the trend. These recent investments join some of Africa’s most innovative startups in the P1 portfolio, including super app Yassir in Algeria, savings app MoneyFellows in Egypt, employee healthcare platform Reliance Health in Nigeria, consumer challenger neobank neobank in Ivory Coast, and Morocco’s ecommerce and fintech app Chari.
The IFC partnership will make it easier for P1’s early-stage tech entrepreneurs to access growth capital, expand their operations, and attract follow-on funding. It will also enable P1 to double down on the sectors in which Africa has vast untapped potential and strong economic advantage, such as fintech and AI-powered SaaS.
Emerging markets such as Africa instead often embrace such technologies at a faster pace, such as the continent’s fintech revolution. In the past few years, mobile money has bypassed the need for card infrastructure, resulting in Africa accounting for 48% of the world’s mobile money accounts in 2022.
P1 Ventures is aiming to support founders utilising emerging technologies, such as generative AI, to disrupt mainstream industries, from healthcare to retail and agriculture. It’s particularly focused on backing repeat founders and experienced operators that have validated products, proven and in-demand software business models that can scale up capital-efficiently, and which have early traction with customers.
The success of this thesis has seen P1 Ventures’ portfolio raise, on average, 35x more follow-on capital for every $1 invested, and its Fund II portfolio companies specifically tripled their revenues year-on-year.
Recognising the potential of AI in its own processes—and to tap into the emerging trend being seen across VC—P1 Ventures recently hired a data scientist to integrate AI into its workflow and investment processes.
This is the first time a fund has leveraged AI in this way, to source deals and talent, within the African ecosystem. In doing so, P1 Ventures aims to enhance its investment processing capacity, identify promising opportunities more efficiently, and lead the way in terms of AI-powered deal flow on the continent.