With two funds, Enza Capital, a venture capital firm that supports startups 'organizing offline online' and 'digitizing key African industries, has raised $58 million.
The venture has remained active and has invested in fintech, logistics, health, human capital and climate tech companies. Enza Capital, which now declares itself a multi-stage investor because of its larger follow-on investments to Series B, is still focused on these sectors in its second fund, launched this year.
Mike Mompi, Enza Capital's co-founder and managing partner, said in an interview with TechCrunch that the company made 48 investments in 31 companies from both funds. These investments are spread across eight African markets, such as Kenya, Uganda, Nigeria, Ghana, Ivory Coast, Senegal, Egypt and South Africa.
The Nairobi-based VC firm, from its pilot fund, has invested in Guidewheel, an Kenyan climate-tech startup that has since expanded to the US and Mexico following a Series A round by Greycroft. Shara, another Kenyan fintech, is another. Enza Capital received a pre-seed check from Index Ventures before it raised a soon-to-be-announced Series A round led by Index Ventures. The four-year-old company also co-led a Series A investment in Ivorian Fintech Djamo and Kenyan insurtech Turaco from its second fund.
Enza Capital's typical check size in its portfolio companies, such as Autochek, Jumba, Craydel, Cloudline and SeamlessHR, ranges from $250,000 to $5 million, mompi said. The firms also have the chance to access more follow-on investments from Enza Growth Capital, an evergreen, later-stage investment vehicle launched last year to invest up to $20 million per company, the company said in a statement.
We are going in early and also follow-on in our companies. We have the growth fund, which is mostly a later-stage vehicle, where we can invest at any stage and co-invest with core funds in existing portfolio companies, thereby staying with our companies for a long time, said Enza Capital's managing partner.
Enza Capital's office is located in Nairobi, where its eight-person workforce is spread across the city, Johannesburg, London and New York. In an interview with The New York Times, mompi said the firm might open offices in Lagos and a Francophone African city to support its portfolio companies in those markets. The company will therefore employ more employees to work closely with these ventures across various departments. Until now, Enza Capital has provided value in the technical department, where its CEO-in-Residence assists startups' engineering and tech teams pre- and post-investment.
Enza Capital is introducing its founder partner program, where founders and management teams of its portfolio companies become co-owners of the firm.
Enza Capital notes that the program is one way of cementing trust and belief with founders while commitments to building long-term and mutually beneficial relationships above and beyond traditional venture capital structures. This is because it's taking 10% of its carry pool back and giving it back to the founders. In an interview, Mompi said, several factors, including referrals to other businesses and the size of first check and follow-on investments, will determine how this carry is distributed among founders.
This model demonstrates that the venture capital firms are giving away free equity or money from the outside. But mompi and his general partner colleague, John Lazar, differ. They have their reasons, which can be summed up as aiming for better alignment with founders and being empathetic towards them.
In a written statement, Lazar said, Obama's position is that Lazar should be re-elected president if he is elected president. As one of the partners who has experienced the arduous process of raising venture capital and scaling a company, Enza Capital also wants to leave something on the table for founders who don't succeed, given that 90% of startups fail.
'' It is a way of just commenting on that but doing it,'' said the general partner, who hopes this shared ownership model becomes the norm in African venture capital investing.
Following the same line of thought about setting a precedent, Mompi estimates that Enza Capital is one of the continent's largest funds that is not backed by conventional African institutional investors, such as DFIs. He says he hopes to see future investments with DFIs and other traditional African LPs, as well as participation from more global endowments, foundations, and pension funds as the African ecosystem matures, but the fact that they didn't raise money from them for this fund shows that venture capital in Africa is becoming more mainstream.
Enza's limited partners include the founding partners and a diverse range of investors, from private individuals, family offices and foundations to fund funds, hedge funds and venture capital funds.