$25 M Venture Debt Fund Programme for African startups launched by TLG, Future Africa

A US $25 million venture loan fund from TLG Capital and Future Africa has been established, with the money going to firms in the Future Africa portfolio that fit certain requirements.

While Future Africa is an early-stage investor that has invested US $10 million in 97 portfolio businesses to far, TLG Capital is an investment holding company that focuses on private investment possibilities in SMEs throughout the capital structure and notably in the credit arena.

The two businesses have partnered to provide entrepreneurs with a programme that includes workshops that will educate them about available funding options and best-in-class business practises. They will also urge a laser focus on cash management and institutional grade CFO reporting, work on industry maps to establish institutional lender-friendly business plans, and develop best practises for information rights and institutional governance.

These qualifying companies will thereafter be eligible for financing from TLG Capital. The US$25 million venture debt fund will be the first of its 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. This is important because venture investors are increasingly focusing on profitability and cash flow, rather than growth and expansion.

“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 at 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, the investor at TLG Capital.