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African startups have another $ 100 million in VC to pitch for after Novastar Ventures’ latest raise.

The Nairobi and Lagos based investment group announced it has closed $ 108 million in new commitments to launch its Africa Fund II, which brings Novastar’s total capital to $ 200 million.

With the additional resources, the firm plans to make 12 to 14 investments across the continent, according to Managing Director Steve Beck. He spoke to TechCrunch on Novastar Ventures’ plans for the new fund.

A notable update to Novastar’s VC focus is geographic scope. The firm was originally co-founded in Kenya by Beck and British investor Andrew Carruthers and built its first portfolio largely around companies based in East Africa. Novastar Ventures made 15 investments with its first fund, including companies such as Uganda and Kenya focused energy startup SolarNow and agtech venture M-Farm.

“The second fund is basically the same strategy as the first, but…the biggest difference is that we opened up a second front in West Africa — more particularly to be in and around the entrepreneurial system in Lagos,” Beck told TechCrunch on a call.

Before closing its Africa Fund II, Novastar Ventures had already made several investments in West Africa, including leading a round in Nigerian on demand motorcycle transit startup Max.ng and backing Ghanaian health company, MPharma. Novastar opened an office Lagos in 2019.

On the types of startups Novastar will target with its new fund, the focus is more on mission than industry silos, according to co-founder Steve Beck. “We’re sector agnostic. I would describe us more as a segment fund than a sector fund,” he said.

“We really try to look for businesses called breakthrough businesses, [those] that are addressing the biggest problems in the largest markets.”

That has led Novastar Ventures to invest in digital companies in education, information access, agtech, mobility and off-grid energy.

“Essentially what we’re doing is looking for those businesses that are addressing the basic needs, basic goods and services across the true mass markets of the continent,” said Beck.

On whether the firm is a dedicated impact fund, Beck said, “The way we characterize ourselves is we’re a commercial venture fund with an impact screen.”

On investment amounts and types, Novastar Ventures is fairly flexible on ticket size, from seed to later stage.

“We’re gonna…have some portfolio companies where we put to work a million dollars or less or were going to have some where we put $ 8 or $ 9 million dollars in through capital rounds. That’s…the deployment strategy,” Beck said.

Novastar Ventures works closely with its portfolio companies, according to its co-founder.

“We’re very active investors and always take a board seat to be close to the entrepreneurs. We often are the first institutional investor that they have.”

Africa Top VC Markets 2019

Image Credits: TechCrunch

Startups who want to pitch to the company can reach out to the fund’s founders and directors via the website or LinkedIn, according to Beck. He added that Novastar Ventures is recruiting to add another member to its investor team in 2020.

The firm’s latest raise and $ 200 million capital amount creates another high value fund focused on African startups.

On the high end of estimates, the continent’s tech ecosystem reached $ 2 billion in VC to startups in 2019, compared to less than half a billion dollar five years ago.

Other large Africa focused VC shops include TLcom Capital — which closed a $ 71 million fund in February —  and Partech, which doubled its Africa fund to $ 143 million in 2019. The venture arms of major global companies have also become more active in African tech recently, including that of Goldman Sachs and Visa.


TechCrunch

Kumu Holdings, a live streaming startup based in the Philippines, announced today it has raised about $ 5 million in Series A funding, earmarked for new features and growing its operations.

The round was led by Openspace Ventures, an early investor in Go-Jek, with participation from Kickstart Ventures, media conglomerate ABS-CBN, Gobi-Core Philippine Fund, and returning investors Summit Media and Foxmont Capital Partners.

With much of the country under COVID-19 lockdown or curfew orders, Kumu says usage of media and entertainment apps has increased. To address demand, the startup has launched new features over the past month to allow organizations like churches and industry groups to hold online events.

Kumu says it now has three million registered users and about 25,000 live streams broadcast each day, with average daily usage of about one hour.

Founded two years ago by Roland Ros and Rexy Josh Dorado, Kumu aspires to be a “super app” for Filipinos around the world, integrating live streaming, video chats and gaming, with plans to add online payments and e-commerce functions, too. Kumu’s upcoming features include a live commerce platform that allows users to buy items during live streams, giving content creators an additional source of revenue.


TechCrunch

Aspect Ventures, an early-stage, five-year-old, San Francisco-based venture firm founded five years ago very notably by two veteran VCs who happen to be women, is splitting up. Cofounders Jennifer Fonstad, formerly of DFJ, and Theresia Gouw, formerly of Accel, are launching separate firms, a source confirms.

The WSJ reported the news earlier today.

Fonstad tells the outlet that the split owes to “different leadership styles and different ways of operating at the portfolio level.”

Going forward, she plans to operate under the brand Owl Capital and to invest in growth deals, including in enterprise software, which has been a major focus area for Aspect, with occasional exceptions, including the newly public consignment business TheRealReal and a direct-to-consumer jewelry brand called Baublebar.

Gouw, who is appearing in several weeks at our TechCrunch Disrupt event to talk about industry trends, declined to comment. But some members of Aspect’s team are joining her at new firm, aCrew, including Lauen Kolodny, who joined Aspect five years ago and was promoted from principal to partner in 2017; and Vishal Lugani, who joined Aspect as a principal in 2016 after spending 3.5 years as a senior associate with Greycroft and whose LinkedIn bio now identifies him as a founding partner with aCrew.

Team members who are meanwhile joining Fonstad include Chad Herrin, a former SuccessFactors VP who has been a venture partner with Aspect since last year; and Rebecca Hu, who spent a year with Earlybird Venture Capital before joining Aspect roughly one year ago as an investor.

Aspect had raised $ 150 million for its debut fund and a second $ 181 million fund at the start of 2018. Gouw, Fonstad and the rest of their Aspect colleagues will continue managing out these investments, though they will be making all new investments out of their respective new vehicles, presumably as they are locking down capital commitments.

According to the WSJ, aCrew is targeting $ 175 million for its debut fund, while Owl Capital is shooting for $ 125 million in capital commitments.

The firm is far from the first to split over clashing management styles. Most recently, Social Capital drastically changed shape, with cofounder Mamoon Hamid heading over to help recharge Kleiner Perkins, and numerous other early members of the firm leaving to found Tribe Capital.


TechCrunch

Last year, we told you about a New York-based startup that had begun lending cold hard cash to cryptocurrency holders who don’t want to offload their holdings but also don’t necessarily want so much of their assets tied up in cryptocurrencies.

Today, that two-year-old company, BlockFi, is announcing $ 18.3 million in Series A funding led by Peter Thiel’s Valar Ventures, with participation from Winklevoss Capital, Morgan Creek Digital, Akuna Capital, and earlier backers Galaxy Digital Ventures and ConsenSys Ventures.

Apparently, BlockFi is gaining some traction.

Last year, after raising $ 1.5 million in seed funding from ConsenSys Ventures, SoFi and Kenetic Capital, it secured $ 50 million led by Galaxy Digital Ventures (the digital currency and blockchain tech firm founded by famed investor Mike Novogratz) that is used to loan out cash to customers who use their bitcoin and ethereum holdings as collateral.

The minimum deposit required: $ 20,000 worth of cryptocurrency.

According to founder Zac Prince, who talked with Bloomberg about BlockFi’s newest round, enough people are now using those loans that BlockFi has seen its monthly revenue grow more than 10 times since January.

No doubt the uptick in loans correlates with the rebound in Bitcoin’s value, which was priced as low as $ 3,400 earlier this year but is now valued at roughly $ 11,400.

Prince also told the outlet that he expects annual revenue to hit eight figures by the end of this year. In startup land, that means it’s time to roll out new money-making services. BlockFi already introduced a savings account product earlier this year that it says enables investors to earn interest on their assets. They are not backed by the FDIC, though the company says it “operates with a focus on compliance with US laws and regulations.” And while it won’t say exactly what’s coming up next, it says more products are being added to its existing platform in a statement about the new round.

Prince previously spent roughly five years in consumer lending and began investing his own money in crypto in early 2016.

He told us last year that his “lightbulb moment” for the company came as he was in the process of getting a loan for an investment property. Instead of using a traditional bank, he decided to list his crypto holdings to see what would happen, and the response was overwhelming. “I realized that there was no debt or credit outside of [person-to-person] margin lending on a few exchanges, and I had the feeling that this was a big opportunity that I was well-suited to go after.”

Other companies providing crypto-backed loans that are issued in fiat currencies include CoinLoan, SALT Lending, Nexo.io, and Celsius Network, among others.


TechCrunch

MaC Ventures, the new Los Angeles-based investment firm formed from the merger of Cross Culture Ventures and M Ventures, has quietly started deploying capital from its fund.

One of the firm’s first disclosed investments is Edge Delta, which announced a $ 3 million seed round earlier this week.

The Seattle-based company, which has a tool to predict and identify faulty code and potential security issues in software designed for mobile environments, reflects the new continuing focus on companies that reflect the changing cultural environments throughout the commercial, cultural and technological worlds.

And if anyone knows anything about downtime and application failures, it would be the two co-founders who have held positions at Microsoft, Twitter and Sumo Logic. That’s the background Ozan Unlu, a Microsoft and Sumo Logic alum, and Fatih Yildiz, who spent years at Twitter and Microsoft, will leverage as they pitch their services. 

“We have reached the inflection point for centralized security analytics, SIEM products like Splunk are struggling to scale and a lack of mature SaaS offerings mean that if customers want to keep up with growth in their environments, innovation is required,” said Will Peteroy, founder and chief executive of ICEBRG (acquired in 2018) and chief technology officer for Security at Gigamon, in a statement.

That innovation is something that M Ventures and Cross Culture have tried to identify according to previous statements from both founders. And the merger between both firms was likely about growth and scale. Both firms have co-invested on a number of deals and both share the same emphasis on cultural shifts that create new opportunities.

Shared portfolio companies between the two firms include Blavity, BlocPower and Mayvenn, and each reflect a different aspect of the firms’ commitment to the transformations impacting culture and community in the twenty-first century.

BlocPower is focused on urban resiliency and health in the face of new challenges to the power grid; Blavity has become the online community for black creativity and news; and Mayvenn is leveraging the economics of community to create new entrepreneurs and enable new businesses.

For Adrian Fenty and Marlon Nichols — the two managing general partners of the new fund — and general partners Charles King and Michael Palank and partner Alyson DeNardo, MaC Ventures is a logical next step in their progression in the venture business.

Fenty, the former mayor of Washington, DC and an early special advisor to Andreessen Horowitz seven years ago, has long been interested in the intersection of technology and governance and said that politics was a great introduction to the venture world in an interview with TechCrunch when he joined Andreessen:

“As a mayor you have a lot of districts you work with, and every day is different,” Fenty said, noting that the same could be said for VCs who work with different startups. However, the pace will likely be a bit quicker in this space than it is in the political realm. “I believe that change should happen fast and in big ways, and that’s the tech industry,” he said. “Some of these entrepreneurs and CEOs, their energy and ability to come up with new ideas is infectious.”

As for Nichols, the introduction to venture capital came through work at Intel Capital before striking out with Troy Carter, a limited partner in the MaC Ventures fund, to form Cross Culture.

As the new firm finds its legs, it’s likely that some of the guiding principles that Nichols expressed when talking about Cross Culture will carry over to the new vehicle.

“This is the time to be here,” Nichols said in an interview earlier this year. “If you are going to invest in the companies of tomorrow you have to go where the world is moving to — and that’s black and brown, honestly.”


TechCrunch

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