Investment
4DX Ventures Closes Second Fund with $60M, adds Dikembe Mutombo as Senior Advisor By Tage Kene-Okafor
PAN-AFRICAN VENTURE CAPITAL FIRM 4DX Ventures has completed the final close of its second fund at $60 million. The second fund, launched in the first quarter of this year, was expected to close at $50 million, but investor and limited partner (LP) interest saw the fund oversubscribed. The LPs involved are unnamed. They include U.S.-based asset managers, a university endowment, global family offices, tech founders, hedge fund portfolio managers and investors from private equity and venture capital, the firm said. The effort by the New York, Accra and Cairobased firm, an early investor in African unicorns Flutterwave and Andela, follows large fund closes by the likes of Partech, Novastar, Algebra and TLcom Capital that have sporadically happened on the continent. With large funds, most of these firms tend to find their sweet spots in growth-stage deals, particularly in Series A and B. But recently, they are beginning to get involved in earlier rounds to gain stakes to help them compete for the late-stage investments. For instance, TLcom Capital, a $71 million panAfrican fund that initially made investments only in the growth stage, led pre-seed rounds in Nigeria’s Okra and Autochek last year (it co-led the latter with 4DX Ventures). Pre-seed to Series B are the stages on which 4DX Ventures is focused, founding partners Walter Baddoo and Peter Orth told TechCrunch in an interview. “The quality of founders and team is really our North Star. And our goal is to partner with the very best teams going after transformative opportunities across the continent,” Orth said. “And you know, Walter and I personally have experienced investing in companies from the idea stage to public markets and, generally speaking, we think that from the 80
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pre-seed to Series B stage, it’s still early enough to deliver the type of returns that we’re looking for as an early-stage fund.” The founding partners have known each other for more than 20 years. Between them, they have years of operational and financial experience working at Morgan Stanley, J.P. Morgan and Bridgewater Associates. They started 4DX Ventures officially in 2017 after three years of investing personal funds in African startups. Global talent marketplace Andela Walte and payments company Flutterwave were part of the firm’s early success, generating significant secondary returns due to their unicorn status. 4DX Ventures’ first fund was a bit over $20 million and it invested in startups such as Ghanaian health tech startup mPharma and Kenyan B2B e-commerce platform Sokowatch. It has welcomed the likes of Autochek, Breadfast, MaxAB, Taager, Trella and Yoco from this second fund of $60 million. Pan-African VC firms predominantly write their checks to the Big Four markets: Nigeria, South Africa, Egypt and Kenya because that’s where most of the continent’s opportunities reside. 4DX Ventures is not entirely different, as most of its portfolio companies are based in these four countries. But Orth is quick to add that the firm has begun looking into other countries, especially in the Francophone region; case in point, the investment it co-led into Ivorian fintech CinetPay this month. As for industries, 4DX Ventures says it is a “generalist,” but most of its investments have taken place in fintech, B2B e-commerce, healthcare and logistics. “Our goal is ultimately to invest in companies DAWN
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