Olumide Soyombo establishes Voltron Capital to facilitate funding for African startups
Olumide Soyombo establishes Voltron Capital to facilitate funding for African startups
Africa's technology sector has also continued to receive significant funding from venture capitalists and angel investors. Olumide Soyombo is an angel investor who has been quietly investing in startups since 2014. He announced today that he is launching a venture capital (VC) fund for African startups.
Voltron Capital is a venture capital firm co-founded by Soyombo and Abe Choi, a US-based entrepreneur and investor.
The fund will establish a defined structure for pooling funds from multiple investors. The funds will be used to invest in startups that have been thoroughly vetted and determined to be viable.
According to Soyombo, he is not interested in managing a full fund. “People, including high-net-worth individuals, ask me to accompany them whenever I invest, and I also have startups seeking capital,” he explained. However, I am not attempting to obtain a full-time position by managing a full fund, which is why we structured it this way.”
Mr Soyombo's investment as an angel brought him into contact with a large number of startup founders, and there are few deals in the technology space that he is unaware of. Whether it's a pre-seed or seed round, Soyombo connects startups with investors who can invest alongside him.
On the African continent, there are numerous private venture capital funds such as Voltron Capital. Among them is Dotun Olowoporoku's Novastar Ventures. These venture capital firms are critical to the space because funding is one of the most significant challenges that startups in Nigeria and other parts of Africa face.
Olumide Soyombo’s antecedents in tech funding
Soyombo co-founded Leadpath, a technology startup accelerator, in 2014. Participating startups complete a three-month program before pitching to investors during a demo day. He quickly discovered, however, that there were few investors willing to take on the risk of funding startups in Africa's ecosystem. Thus began his foray into the venture capital world.
Soyombo has invested in 33 startups in Africa to date. Paystack, Lemonade Finance, Gbedu, Koa, Fantastic.ng, Engage, Powercube, Accounteer, Leadspace, Send.ng, Trove Finance, and Brass are just a few of the companies.
At least 13 of the startups are in the financial technology sector, while the remainder are in the entertainment, gambling, and casino, clean energy, co-working, and logistics sectors, among others. Voltron Capital will also invest significantly more in fintech startups than in startups from other sectors, if the diversity of his existing portfolio is any indication.
With the help of venture capital firms such as Microtraction and Future Africa, the continent's funding challenge is gradually being overcome. African startups raised a record $1.19 billion in the first six months of 2021. When compared to the $1.1 billion raised by these startups in the entirety of 2018, it is clear that progress has been made in terms of making capital available to startups.
However, there has been slow progress in terms of increasing the number of African venture capitalists investing in African technologies, which is where individual venture capitalists such as Olumide Soyombo and Voltron Capitals can make a significant contribution.
The addition of another venture capital firm focused on African startups is a positive development that will help accelerate their growth from the seed and early stages.
