A bold investment

P1 Ventures succeeds in completing its second financing round worth $35 million to expand AI technologies in Africa.

As international investors withdraw from African startups, local VC firm P1 Ventures demonstrates that the market still holds significant potential for those on the ground.

The company has successfully completed a second round of funding, raising $35 million for Fund II.

Notably, the fund has welcomed the World Bank’s International Finance Corporation (IFC) as its first public institutional investor.

Additionally, P1 Ventures has expanded its in-house data science team to further leverage AI in sourcing deal flow and talent.

Founded in 2020, P1 Ventures is committed to supporting Africa’s top entrepreneurs and bridging the capital gap facing startups across the continent. While much of the foreign investment is concentrated in Africa’s major economies such as Kenya, Nigeria, Egypt, and South Africa, P1 Ventures has a diverse database of entrepreneurial talent from across the continent.

Despite the global VC market shrinking in 2023, leading to a 43% decrease in foreign funding for Africa, P1 Ventures has remained resilient.

The recent investments add to the company’s portfolio, which includes innovative startups like Yassir in Algeria, MoneyFellows in Egypt, Reliance Health in Nigeria, neobank in Ivory Coast, and Chari in Morocco.

The partnership with IFC is expected to facilitate access to growth capital for early-stage tech entrepreneurs backed by P1 Ventures, enabling them to expand operations and attract follow-on funding.

This collaboration will also allow P1 Ventures to focus on sectors where Africa has untapped potential, such as fintech and AI-powered SaaS.

P1 Ventures’ confidence in Africa’s potential is rooted in the advantages that emerging markets offer over developed ones.

Unlike developed markets hindered by job protectionism and legacy regulations, emerging markets like Africa often embrace technologies like AI at a faster pace, as evidenced by the continent’s fintech revolution.

For instance, Africa accounted for 48% of the world’s mobile money accounts in 2022, bypassing the need for traditional banking infrastructure.

P1 Ventures aims to support founders utilizing emerging technologies to disrupt various industries, from healthcare to retail and agriculture.

The company focuses on backing repeat founders and experienced operators with validated products, scalable business models, and early traction with customers.

The success of P1 Ventures’ investment strategy is evident, with its portfolio companies raising 35 times more follow-on capital for every dollar invested on average.

Companies in Fund II specifically tripled their revenues year-on-year.

Hisham Halbouny, Co-founder and Managing Partner of P1 Ventures, expressed optimism about the innovation and resilience displayed by African entrepreneurs.

He emphasized the importance of local VC firms in supporting founders amid the retreat of international investors, predicting that this will be a promising year for regional venture capital funds.

Recognizing the potential of AI in investment processes, P1 Ventures recently hired a data scientist to integrate AI into its workflow. This move aims to enhance investment processing capacity, identify promising opportunities more efficiently, and lead AI-powered deal flow in Africa.

Mikael Hajjar, Co-founder and Managing Partner of P1 Ventures, highlighted the significance of building in-house data science tools to augment the investment team’s capabilities.

He believes that this initiative will help the company focus on key themes and create more value for portfolio companies.

Olivier Buyoya, IFC’s Regional Director for West Africa, emphasized the organization’s support for market-disrupting digital business models.

The investment in P1 Ventures aims to boost inclusive economic growth across the continent, particularly in underserved markets in Francophone Africa.

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