Kola Aina’s Ventures Platform Is Doubling Down On An Ambitious Gameplan

Ventures Platform, a prominent Pan-African early-stage venture capital (VC) firm, has released its 2023 Impact Report, offering a detailed examination of its role in the continent’s rapidly growing tech ecosystem.

With a portfolio that spans 72 startups and over 126 founders across the continent, contributing to the creation of more than 4,264 direct jobs and an estimated 20,650 indirect jobs, Ventures Platform is emerging as a key player in driving both financial growth and socio-economic progress across Africa.

Founder and Managing Partner, Kola Aina, takes pride in Ventures Platform’s impressive track record, highlighting in a recent interview with WT that four out of its six investment vehicles have achieved a DPI (Distributed to Paid-In Capital) above one.

“That basically means in four out of six vintages, we’ve made more money than we invested, and we turned actual capital back to investors, something we’re proud of,” he said,  a significant achievement in the venture capital scene.

The firm’s model balances commercial success with a strong commitment to social impact, the tech investor emphasised, noting the potential of VC funding to shape and shore up the future of African innovation while fostering widespread societal benefits.

And, every now and then, that can mean putting out fires.

Saving The Day

Notable in Ventures Platform’s success is its unique approach to crisis management, which has proven critical in an often volatile market. The firm’s intervention in companies like agritech startup Thrive Agric and business banking solution Brass highlights its proactive stance in safeguarding both financial investments and broader ecosystem stability.

“I often introduce myself as an entrepreneur pretending to be an investor,” Aina told WT over a call. “If you’ve built a business yourself, you would be very familiar with failure… we do not shy away from challenges.”

This philosophy is evident in how Ventures Platform managed to turn potential failures into opportunities for growth. For instance, Thrive Agric, which faced significant operational challenges, is now “10 times the business it was in 2020” thanks to Ventures Platform’s hands-on support, Aina said.

His background as an entrepreneur and technology operator provides him with a unique perspective on the struggles startups face, Aina explained, allowing Ventures Platform to engage more empathetically with portfolio companies.

This approach has not only rescued businesses but also positioned them for long-term success, ensuring that ventures like Brass, which faced challenges with managing customer deposits, could stabilise without compromising customer trust.

“As long as the original business case still exists, as long as there’s no outright fraud by the founders, we’re very open to working with founders through difficult times,” he said.

“We’ve seen, some of the best fortunes and some of the greatest impacts being created after companies are able to go through a challenging phase.”

Aina also emphasised that Brass, which has since seen a leadership revamp, has gotten past the crisis and customers have been able to access their funds even before the takeover by a consortium was announced.

Impact vs Profit

Aina believes there is no inherent conflict between achieving financial returns and making a social impact. “For impact to be sustainable, it ideally should be delivered through business models that are sustainable,” he explained, emphasising that the fund is first and foremost a commercial venture focused on delivering returns to its investors.

He also made it clear that Ventures Platform does not seek out “impact businesses” specifically, as the primary criterion for any investment is its potential to deliver strong financial outcomes. While the fund adheres to Environmental, Social, and Governance (ESG) standards, excluding sectors like weapons manufacturing and gambling, Aina stressed that profitability and impact often go hand in hand in the African context.

The investor added insights into what the fund looks for when identifying promising investments. “The first and perhaps most important factor is finding a clear market-creating innovation,” Aina explained, referring to businesses that enable access to essential services for underserved segments of society.

Ventures Platform prioritises companies that solve critical needs—what Aina calls “painkillers,” rather than merely enhancing wants, or “vitamins.” This approach ensures that the businesses they back not only generate strong returns but also deliver significant impact, particularly in Africa where many consumers are lower-income.

Additionally, the fund evaluates the inclusivity and diversity of the business’s practices and team, encouraging balance, especially in gender representation. These criteria are central to Ventures Platform’s investment thesis, leading them to pass on companies that don’t align with their focus on market-creating innovations, even if they appear to be good businesses.

The fund also engages in initiatives through its foundation to support long-term ecosystem growth, particularly in areas like fostering female entrepreneurship, but these efforts are separate from its commercial investments.

Expanding Gender Diversity in Tech

Ventures Platform is also at the forefront of addressing gender disparities within the African tech ecosystem. The impact report reveals that women make up 12.9% of employees within the firm’s portfolio companies, with 21% of these companies having at least one female founder.

Moreover, women hold 32% of leadership roles within these businesses. While these numbers are encouraging, Aina acknowledges that more needs to be done. “We realised we needed to be more deliberate,” he said, discussing the firm’s efforts to increase deal flow from female-led startups.

To this end, Ventures Platform launched the “Leveling VC” initiative, which aims to increase venture capital funding for female-led startups from 13% to 25% by 2028.

This initiative is part of a broader strategy to foster gender diversity not just within Ventures Platform’s portfolio but across the entire African tech landscape.

“This is not asking for a reduction of standards,” Aina emphasised, noting that the firm remains committed to backing only the most promising companies, regardless of the gender of their founders.

Looking ahead, Aina’s long-term vision for Ventures Platform is to “democratise prosperity in Africa through our investments.” He sees the firm’s growth as a catalyst for broader impact, with plans to scale investments significantly and expand their reach across every region of the continent. Aina emphasised the importance of supporting African innovators and building a sustainable ecosystem, ensuring that Ventures Platform continues to deliver strong returns to investors while driving socio-economic progress across Africa.

Catalysing Pan-African Innovation

Ventures Platform’s impact is not confined to a single country. The firm has adopted a pan-African investment strategy, funding startups across regions including South Africa, Zambia, Uganda, Kenya, Egypt, and Senegal.

This geographic diversification allows Ventures Platform to mitigate risks and tap into a wider pool of innovation. Over the last eight years, the firm has funded dozens of startups, many of which have become category leaders in sectors such as fintech, healthtech, and insurtech, including notable names such as Paystack, Moniepoint, RelianceHMO, and Tizeti among others.

One standout example is PiggyVest, a fintech company that has facilitated access to financial services for over 4 million underserved individuals in Nigeria. This has contributed to a 13.5% increase in financial inclusion in the country, demonstrating both commercial success and societal impact.

Aina is also keen on the role of the current artificial intelligence (AI) wave in shaping the future of African tech, while mindful of sifting hype from substance. “We’ve recently been building AI into our tech stack to help us be more efficient and do more,” Aina shared, highlighting how the firm handles the challenge of reviewing thousands of pitches annually and managing a large portfolio.

Ventures Platform is also actively investing in companies leveraging AI, such as Lengo AI, which helps FMCGs optimise market strategies and improve distribution to small, informal stores across Africa. The investor is optimistic about the future of AI in the African tech landscape, especially with such innovative solutions emerging.

Meanwhile, in the wake of the recent venture capital downturn, Aina shed light on how the shake-up has impacted not just startups but also VCs themselves.

“LPs are more anxious for liquidity and DPI,” Aina noted, pointing out that slower distributions have created a ripple effect throughout the industry.

As limited partners (LPs) demand quicker returns, general partners (GPs) are consequently placing more pressure on their portfolio companies to deliver. Aina also highlighted a decline in interest from local investors, attributing it to the struggles in the local economy, a tougher foreign exchange environment, and a slowdown in liquidity.

Despite these challenges, Aina maintains that Ventures Platform remains committed to investing, confident that their continued efforts during this challenging period will ultimately be rewarded. “The smart investors know that the best time to invest is when everyone is afraid,” he remarked, reflecting the firm’s resilience in navigating these turbulent times.

Sustainability and Corporate Governance

Ventures Platform’s investment strategy is also rooted in sustainability and strong corporate governance. The firm prioritises backing companies that adhere to the highest standards of transparency, accountability, and ethical practices.

“We believe that strong business governance is critical to sustainable growth,” Aina stated, highlighting how Ventures Platform supports businesses in implementing sustainable practices that reduce environmental impact and drive long-term benefits.

This focus on governance and sustainability is not just a moral stance but a strategic one, he added. Ventures Platform’s insistence on solid unit economics from the outset ensures that its portfolio companies are built on sound business models capable of delivering long-term value.

“Not all ideas are venture-backable,” Aina pointed out, emphasising the importance of ensuring that a business model can be profitable from day one, even if profitability is temporarily suspended in pursuit of growth.

Ventures Platform’s 2023 Impact Report, alongside Aina’s thoughts, paint a picture of a venture capital firm that is both ambitious and cautious, striving to drive innovation while navigating the complexities of Africa’s diverse markets.

The firm’s focus on job creation, financial inclusion, gender diversity, and corporate governance highlights its broader vision for the continent. However, the challenges that lie ahead—scaling its impact across Africa, closing the gender gap, and maintaining high governance standards—will test the resilience and adaptability of its strategy.