The fund is earmarked from TLG’s existing funds, for companies from the Future Africa portfolio that meet specified criteria. Under this shared mandate, TLG and Future Africa will work together to build a best-in-class service suite for portfolio companies beyond capital, helping portfolio companies with investor introductions, talent acquisition, financial planning and analysis, and industry benchmarking.
A new program for African entrepreneurs
The two firms have come together to offer a program designed for founders, consisting of workshops to help them understand financing possibilities and best-in-class practices in an open and transparent manner. Simultaneously, the two investors will work on industry maps to design institutional lender-friendly business plans, encourage a laser focus on cash management and institutional quality CFO reporting, and build best practices as regards to information rights and institutional governance. Companies that meet these criteria will then qualify for financing provided by TLG Capital. The $25 million venture debt fund will be the first of its kind and scale for technology startups in the region, with outputs including workshops to support founders, funding based on KPIs, and the building of industry benchmarking and impact metrics to drive a structured credit offering – crucial as venture investors increasingly focus on profitability and cash flow, overgrowth and expansion.
A shared vision
Since 2016, Future Africa has deployed into 97 portfolio companies across Africa with an aggregate value of US$6 billion. Future Africa believes that investing in mission-driven entrepreneurs that are building solutions to Africa’s biggest challenges represents a once-in-a-lifetime opportunity to unlock African prosperity. TLG shares a similar vision, and via its strong debt structuring expertise, aims to work closely with Future Africa to execute on this ambition. TLG has invested in over 30 deals to date and exited over 20 – a testament to the importance of investing using structures that clearly and consistently envision achievable and timely exits. In response to the growing volume of capital flows from venture investors into Africa (estimated at US$ 4 billion in 2021), Aum Thacker joined TLG Capital in 2020: building the firm’s focus on originating and executing transactions within the growth equity space.
‘Future Africa has a track record of tapping into powerful structured credit models to rapidly and efficiently scale the impact of startups it backs. Moove BV is one of many such examples within our portfolio. We are delighted to work with a financing partner like TLG, an expert in structured finance products of this nature, to develop an asset-backed finance business that meets the needs of our fast-growing companies in this financing environment,” said Mayowa Olugbile, General Partner, Future Africa.
“We have seen access to liquidity become increasingly challenging for founders, and are pleased to reiterate TLG Capital’s commitment to Africa’s early-stage entrepreneurs with Future Africa. Having already engaged with 13 of Future Africa’s founders we see common challenges: businesses contend with large currency devaluations in home markets while raising US Dollar equity, for instance. We are developing a suite of best-in-class products so founders can focus on operating and innovating – while TLG as a structuring partner helps ensure their businesses are best placed in response to macroeconomic headwinds,” said Aum Thacker, Investor at TLG Capital.