TLG Capital and Future Africa launch $25m venture debt financing programme
TLG Capital and The Fund for Africa’s Future (Future Africa) announced the creation of a $25 million venture debt fund. The fund is earmarked from TLG’s existing funds, for companies from the Future Africa portfolio which 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.
The two firms have come together to offer a programme 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 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 start-ups 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, over growth and expansion.
Since 2016, Future Africa has deployed into 97 portfolio companies across Africa with an aggregate value of $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 which clearly and consistently envision achievable and timely exits.
“Future Africa has a track record of tapping into powerful structured credit models to rapidly and efficiently scale the impact of start-ups 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 of 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.