P1 Ventures Complete Second Fund Close at $35 Million

The US-based and pan African VC fund P1 Ventures has announced that it has completed the second close of its second fund at $35 million, aiming to reach $50 million by the final close.

Notwithstanding global investors pulling back from the African start-ups, VC P1 Ventures’ second close proved that the market still holds huge potential for those on the ground. The fund also welcomed 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 deal flow and talent.

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 the African start-ups. 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, according to a report from wamda.

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 start-ups 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 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.

The African Opportunity

P1’s confidence in Africa’s potential stems from the fact emerging markets have several advantages over their developed counterparts. In developed markets, job protectionism, legacy regulations, and infrastructure can hinder the mass adoption of technologies such as AI, especially in large industries, the report said.

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.

Hisham Halbouny, P1 Ventures co-founder and managing partner, said that they were witnessing an unprecedented rate of innovation, high-quality founders, and strong resilience across Africa.

“As international investors retreated, we have stayed contrarian and leaned into the most attractive investment opportunities. We believe this will be one of the best vintage years for regional venture capital funds. Similar to what happened in Latin America a couple of years ago, local VCs have a great opportunity to back great founders at better entry valuations as markets begin to normalise,” Hisham added.

Increasing Investment Capabilities

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.

Olivier Buyoya, IFC’s Regional Director for West Africa, said that by supporting market-disrupting digital business models, our investment in P1 Ventures aims to increase the competitiveness and efficiency of traditional markets in key sectors to boost inclusive economic growth across the continent.

More importantly, our work will help strengthen venture capital ecosystems in Africa, especially in Francophone Africa markets underserved by global venture capital, he said.