• 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 International Finance Corporation (IFC) has joined P1 Ventures as the first public institutional investor.
• Founded in 2020 by Mikael Hajjar and Hisham Halbouny, P1 Ventures is an early-stage VC fund aiming to plug the capital gap facing African entrepreneurs.
• With this close, P1 Ventures is expanding its team in Dakar and Nairobi and is doubling down on sectors like AI-powered SaaS.
• In September 2023, P1 Ventures completed the first close at $25 million.

Press release:

As international investors pull back from African startups, local VC P1 Ventures proves the market still holds huge potential for those on the ground as it completes a second close of $35 million for Fund II. 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. 

Dispersed 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 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. 

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. 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. 

Hisham Halbouny, P1 Ventures co-founder and managing partner, said: “We’re seeing an unprecedented rate of innovation, high-quality founders, and strong resilience across Africa. As international investors retreat, we’ve stayed contrarian. We’ve leaned into the most attractive investment opportunities and 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.”

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.

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.” 

Olivier Buyoya, IFC’s Regional Director for West Africa, said: "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.”