Byld Ventures, a $15 million fund, backs fintechs in Africa • TechCrunch

Two years before Youcef Oudjidane co-founded Sudanese fintech Bloom after failing to find startups coping with currency depreciation in Africa to invest in, he was managing partner and head of EMEA (Europe, Middle East and Africa) at Class 5 Global, a San Francisco-based venture fund with a strong interest in emerging markets.

But Grade 5 wasn’t his first chance to invest. At Solebury Capital, a boutique investment bank later acquired by PNC Financial Services, the British-born entrepreneur, who is of Algerian descent, was a senior associate and worked on several technology IPOs, including Snapchat. And in 2017, he joined the Dubai Future Foundation as Head of Strategy and Investments, a small team that launched the first Dubai Government venture capital fund.

In class 5, Oudjidane led investments in African startups such as Telda, Dash, Moove and Chari. The investor also collaborated with several professional footballers (soccer) such as Mesut Özil, who was a venture partner. His relationships with soccer players — Oudjidane played the sport at the college level and won scholarships — and other athletes have proven valuable to his next adventure: Byld Ventures, a $15 million fund launched in May focused on early-stage startups in Africa phase. Over a dozen athletes have supported the fund, as well as the Dubai government and several named institutional LPs.

“In the last 12 months, entrepreneurs in Africa have contacted me for advice and I personally invested,” the founder said in an interview. “So I decided to institutionalize it and put together a fund.”

Byld Ventures almost reached its first close in June and a second $10 million close last month. It expects to achieve its final conclusion by the end of the year, says Oudjidane. The early stage fund – which has made four investments: Ceviant, Apata, Thepeer and Anchor – consists of four venture partners, mainly founders Oudjidane has backed: Ahmed Sabbah (Telda CEO), Prince Boampong (Dash CEO), Skehinah Adewumi ( Apata CEO) and Kieran Gibbs, a professional footballer.

Oudjidane believes Africa is at the intersection of opportunity, i.e. the next billion people coming online – and judging by the current portfolio of startups upfront, fintech is what fascinates his fund.

“We invest early, sometimes pre-pitch tires; we do the joke as ideally, when you have handed in your resignation, said the founder. “We strive to be the foundational leader in company formation; we want to be there on day one. Fintech is our bread and butter. It’s just what we know and what we love.”

L-R: Youcef Oudjidane (Founder, Byld Ventures), Kehinde Dabiri (Managing Director, Ceviant), Kieran Gibbs (Venture Partner, Byld Ventures), Idris Saliu (Co-Founder, Ceviant), Andy Yiadom (LP, Byld Ventures) and Khalid Al Saud (employee, Byld Ventures).

Fintechs dominate fundraising in Africa, accounting for nearly $3 billion, or two-thirds of all investments made by start-ups across the continent last year, according to a report by market insight firm Briter Bridges. This amount was also more than double the $1.35 billion investment that fintechs in Africa raised in 2020, and tripled the amount in 2019.

Byld Ventures’ portfolio suggests the fund has a narrower focus within the fintech segment as it prefers to back startups building APIs and infrastructure plays. RaliCap, an emerging market fund, operates an identical portfolio setup. Investing in startups that build financial infrastructure is one of Byld Ventures’ main themes, in addition to startups that reverse Africa’s brain drain and repeat founders. For the latter, three of the firm’s investments have gone to entrepreneurs who have had successful exits: Skehinah Adewumi’s Touchtech Payments, Idris Salius’ VANSO and Segun Adeyemi’s Amplify were acquired by Stripe, Interswitch and Carbon respectively.

“I doubt many investors have our knowledge of fintech in Africa,” replied the founder when asked why fintech founders would choose Byld Ventures when going out to raise pre-seed checks. “We build deep and personal ties with founders, maybe a byproduct of being open and vulnerable. For example, some founders are reluctant to seek advice from investors when the proverbial crap hits the fans; chances are, we’ve been through worse. We believe in the power of intellectual honesty and independent thinking to help reach the optimal decisions.”

And when it comes to what the company looks for in entrepreneurs, Oudjidane says that Byld is particularly interested in those who are technical, committed and thrifty. “I think founder-problem fit is also critical because we know how hard it is to build a business and there are a lot of second-order effects on the founder,” he adds.

The four-month-old venture capital firm does not intend to invest in more than 15 to 20 portfolio companies in this first fund, Oudjidane said. According to him, Byld is not a “spray and pray shop” and will invest an average ticket size of $500,000 in startups while reserving around 50% of the fund for follow-on.

Byld Ventures has eyes for startups mainly across Egypt and Nigeria due to its partners’ experiences in these markets; however, it will also keep an eye on Ethiopia and Algeria – the latter a partisan choice citing Oudjidane’s roots. That said, on a personal note, Oudjidane is one of the few people on the continent to juggle founder-investor roles simultaneously; in his case, a Sudan-based fintech and a UK-based fund. He says the somatic synergies between both tasks give him this privilege. “Bloom and Byld are personal to me. I believe in Africa’s potential and want to dedicate my life to “bylding”. It’s up to us [this generation] spearheading change,” noted the founder.