These startups have gone on to amass over $1 billion in market value. The sector-agnostic fund has a focus on fintech, software-as-a-service, digital commerce, and healthtech startups. 

Following the deployment of its $10 million fund within three years, Oui Capital raised its second $30 million fund. With a focus on early-stage startups, the fund says it helps its portfolio companies with fundraising, go-to-market support and acquiring talent. 

In a YouTube video, Tosin Eniolorunda, the CEO of Moniepoint, shared that the fund helped with seeking product-market fit, traction and introductions to potential investors. “They have also been helpful in hiring, especially with some of our key hires,” he added. 

Oui Capital, which funds approximately 2% of the companies that apply to it, invests between $250,000 and $500,000 and looks to own between 5% and 10% of its portfolio companies. 

TechCabal spoke with Olu Oyinsan, the fund’s managing partner, and Oke Ekpagha, a senior analyst, as they shared the fund’s investment thesis and some of its biggest learnings.

Oui Capital has been investing in early-stage startups since 2019. Based on your experience, what would you say are the biggest challenges that these startups face? 

Oyinsan: There are two most important challenges: the first is finding product market fit (PMF). There are a lot of theoretical definitions of PMF, but it’s like trying to run a race and getting on the track that’s going to take you to what the product should do for customers, the type of customers that actually should be using the product, and if they’re paying for it. PMF is everything you need to put in place to start growing. 

The other one, which is very common, is getting the money you need to build the company. Money is scarce everywhere in the world, and for early-stage companies that don’t have traction, it’s very difficult to raise money. Founders have to lean on their other skills to serve as a proxy for the attractiveness of that company.

Does Oui Capital accept startups that do not have product market fit? 

Oyinsan: The short answer is yes. A majority of the companies we have backed did not have product market fit, and that’s why we are early-stage investors. We have invested in a company with zero revenue and very little customer traction. If you look at our portfolio, what the [companies in it] do today is not what we invested in them for. What made Moniepoint, Maad, Duplo and Akiba Digital successful wasn’t what they were doing when we invested. 

As early-stage investors, it’s our job and responsibility to invest in places where we can be helpful. It’s like having a co-founder who does not stay in your office because if we own the company together, we have to do everything we can to make sure that this company is successful. It’s what also generates financial returns. You’re more likely to make better financial returns if you invest in a company that doesn’t look successful yet than in one that has it all figured out. Eighty percent of the companies we invest in don’t have PMF. 

What’s the evaluation procedure like for your portfolio companies? How do you assess which companies you back?

Ekpagha: You don’t get what you’d expect to see, you get what the market has in store. Off the bat, there are certain things I’m looking out for. Firstly, how strong is the founder or founding team? Do they have domain expertise that can directly translate into the new venture that they’re trying to build?

I also look at the business model: is it a scalable business model? Is it fast-growing in terms of businesses that have been in that space? How big is the market and how fast is it growing? Of course, the companies that we tend to invest in are doing something new and are going to be market leaders, but they could be growing quickly in terms of traction and not be able to grow beyond what the market is going to allow. 

I also look for any traction that I can use to benchmark the rest of their success against. Typically, the startups we back don’t have major traction for their users or revenue, but we need to approximate and have an idea of how fast they’re growing already and what that could look like in the future.

What type of founder does Oui Capital back?

Oyinsan: We don’t care where you went to school, what you look like, or what nationality you are. That doesn’t build great companies. Entrepreneurial ingenuity is what builds great companies. I don’t care if you went to Stanford or the Federal University of Technology, Akure.

As you can tell, some of the bigger companies, especially in Nigeria, don’t match the pattern [of studying in Ivy League schools], but the ones who match the pattern are often the ones you are writing about that defraud investors! 

We care about the problem you’re solving, and if you look like you have the grit, guts and expertise to go after it, we will back you. 

Also, some things, like the market and product, don’t depend on the founders. I was talking to a brilliant founder this morning and I told him that he’s probably pursuing the wrong thing. He’s trying to build another payment company and I told him to take a step back and figure out something else because he probably will not be able to get money from us.

Does Oui Capital participate in follow-on investments?

Oyinsan: Yes, we do. In our old fund, we had a ratio of about 20% of the fund for follow-on investments. The new fund has a smaller allocation because we noticed that our first cheques have been more successful than our follow-on cheques.

It’s common knowledge in venture capital that follow-on cheques protect your position, but there are some follow-on investments that we made in our first fund, even though the fund was hugely successful, that we might not have done, following introspection. 

There are many reasons VCs follow on besides financial benefits; sometimes VCs follow on an investment for optics and to catalyse the new round. We could invest in a company in the pre-seed round and it’s doing very well and now they’re raising a new round. New investors want to talk to you about the company, and their next question always is, “Are you investing in the new round if you believe in the company as much as you say you do?” So, sometimes, it’s not even a financial decision. It’s a show of good faith and support for the founders.

Sometimes investors follow on to ease the funding stress and bridge the gap because the company is in a place where they don’t want to spend a lot of time fundraising. Remember, if a company fails or runs out of money, as an investor, you lose your original investment. 

Sometimes investors follow on because they didn’t get the desired percentage or as an anti-dilution tactic. 

What are the ways Oui Capital supports its founders and startups besides funding?

Oyinsan: What usually happens is that we reach out to founders to feel the pulse and ask what keeps them up at night and see how we can solve that. For example, I’m talking to the founder of one of our portfolio companies and he’s very straightforward. He says that he is looking to acquire one or two companies making at least a million dollars in revenue in Ivory Coast and South Africa. Someone on our team has to find the best companies that are making a million dollars a year because that’s what we have to do. We are one of the highest shareholders and we are going to do that at no extra cost.

We also help portfolio companies look for board members or senior staff, we turn out our Rolodex and look for founders whose companies failed or people we have worked with for help. 

If our portfolio companies want to raise a new round, we can also help. For example, with Moniepoint, I took Tosin with me to Rwanda for a conference because other investors were going to be there. The rest is history. If you care about the company, you do everything you need to do to make sure the company succeeds.

Oui Capital has been backing startups for five years now, starting from the time when there was a bubble to the post-bubble reality. What’s your biggest lesson? 

Oyinsan: Coming from the bubble, first of all, we were never the type to FOMO into deals. Look at our portfolio. We never participated in deals where the hype around the deal was greater than the fundamentals of the company. What you call a bubble, I don’t see it as that. But I understand that there was a time when there was valuation inflation and a lot of cash. 

Our biggest lesson is that you have to stay true to your thesis. It pays you over cycles. For example, we don’t have a single portfolio company that was caught in this bubble, and we have over 20 portfolio companies. It’s about just staying true to your thesis. You have to stick to your investment strategy and you just have to stay there. Don’t let the market move you left or right, because if we had invested based on the climate, we would probably not be around by now. 

What problem did you want to address with Oui Capital?

Oyinsan: We said we’re going to democratise access to venture capital. Five years ago, some founders could not get in front of investors. I remember when we introduced Moniepoint to a firm, the first thing they asked was what school the founder went to. What does that have to do with anything? These people were one of the most entrepreneurial teams that you could find at the time. 

Our thesis was to break away from this thinking. I felt I could not do that in any other arrangement. We stick to real entrepreneurs and we have a very strict valuation strategy. We don’t need a large number of companies. We just think it’s not a strategy for Africa; we are more concentrated than most early-stage firms. In our new fund, we’re only going to back 15 portfolio companies. Our thesis is to have a significant portion of equity and significantly support these companies. 

Are you still very hands-on with the companies in your first fund following your new fund? 

Oyinsan: Investing success is not really about investing, it is about returns. You have to build successful companies and you have to take money out. Today, we only take money out of our first fund because these are the companies that have developed enough. You have to keep an eye there because that’s where your interest is going to come from. 

Besides, there’s a magic word called monthly updates. We don’t look at it as fund 1 or 2 because once you’ve made that investment, they are a portfolio company so you support them as a whole. 

It seems that we are now in an era of market correction. How are you thinking about future investments? 

Oyinsan: We never change. What has changed is that easy money has left so it has enhanced opportunities for hard-working money or money that knows what it is doing.  That has presented us with an opportunity to pick up Series A-type companies for seed round prices. 

We are seeing fewer companies with no PMF trying to raise a $7-$10 million pre-seed round. There was a company on the phone with us last week that was trying to do that; I had to laugh. 

We’re now able to spend more time getting to know founders, performing due diligence and sticking to our guns on pricing. I think that’s the only thing that changed. The reason why I said there was no bubble is because the few investors who have stuck to their fundamentals did not suffer the damage of a bubble. It’s the investors who are not versed in doing VC or doing Africa who lost money. 

How are you thinking about exits? 

Oyinsan: There are different ways, but for early-stage funds, the most attractive one is secondaries when portfolio companies raise Series A–C. It’s a very significant opportunity because it usually takes startups 10 years to get to the IPO stage, and the average age of a fund is probably 7–10 years.  

Sometimes there might be a need to pass on the baton to other investors who are in the first year or so of their fund. For example, Reddit, an 18-year-old company just looking to IPO—it probably wouldn’t make sense for an investor from their pre-seed round to still hold shares in the company; their limited partners would probably sue them. 

“The government represents a centrepiece in the accomplishment of our various missions,” Joel Tshilumba, a board member of CFN, told TechCabal. “We are working on several processes to be implemented to promote effective and beneficial collaboration for both parties, in particular, establishing open and regular communication channels with representatives of the Congolese government.”

The fintechs already have 15 companies like MaishaPay, Velex Advisory and Zando on board as they look to make the “fintech industry in the DRC very cooperative and efficient.” Besides fintechs, the CFN will also include major banks like Ecobank and international organisations like Deloitte and PWC. 

In Congo, the fintech sector has seen steady growth in recent years. Tuma’s $500,000 funding round in October—the largest ever in Congo’s fintech space—was an example of the industry’s progress. 

However, a lot still needs to be done to address the country’s financial inclusion rate, estimated at 38.5% in 2022. Especially if the Congolese government’s aim to increase this rate to 55% by 2028 is to be achieved. Tshilumba hopes the association can play “a crucial role in advocating for a regulatory and legislative environment favourable to innovation and the development of fintech.” 

The CFN follows a trend where startups in Africa, due to their increased importance, are partnering with governments to create industry standards. In Nigeria, the startup ecosystem worked with the government to introduce a startup law that governs all startup activities. A tech entrepreneur and investor now serves as minister of tech in Africa’s largest startup ecosystem.

“By working with the government and other stakeholders, it could help shape policies that encourage investment, competition and access to financial services, but above all play a vital role in promoting financial inclusion by supporting the development of innovative technological solutions that expand access to financial services to underserved population segments,” Tshilumba said.

The CFN will also host a physical conference called Congo Fintech Week, which will happen in May, where it will release studies to the public on the progress it has made and how it aims to increase Congo’s financial inclusion rate. The network would also have branches in four of the DRC’s largest cities, Kinshasa, Goma, Lubumbashi, and Matadi.

The deal, a mix of debt and equity, was concluded last week, those people said, while declining to share the exact funding amount.

Over the last few weeks, some Nigerian fintech leaders began working together to keep Brass going, said one person with knowledge of the initial talks. “Brass is a great product that is valuable to customers,” that person said.

“The ultimate goal of this investment is service delivery,” said an investor who asked not to be named to speak freely.

The new capital injection will provide much-needed working capital for the startup after it furloughed employees on March 4.

“I’m happy to share that we’ve resolved these issues, and transactions are working seamlessly once again,” Brass said in an email to customers on Tuesday.

On Tuesday afternoon, several Brass customers shared on X that they had begun receiving pending withdrawals.

Brass did not respond to a request for comments.

Struggles at Brass

Users began noticing withdrawal delays in October 2023, and Sola Akindolu, the company’s CEO, told TechCabal that a major liquidity partner pulled out of a partnership, leaving the startup under significant strain. 

That partner was a major Nigerian fintech, said two people familiar with the matter. Until the middle of 2023, that fintech offered uncollateralised loans to several startups but eventually discontinued this service.

After it began experiencing liquidity problems, the startup approached Flutterwave for an acquisition, but that deal ultimately did not materialise, sources familiar with those talks said. A spokesperson for Flutterwave told TechCabal there were no acquisition plans between the two startups.  

“It is not in any way new for fintechs to approach and support one another behind the scenes,” Brass told TechCabal via mail in March.

The startup also approached larger startups like Moniepoint for a capital injection. Moniepoint declined to provide funding to Brass, according to a source familiar with those proceedings. 

Fatokun has extensive experience as a board member and board chair, having served on more than five boards in the last decade. He is the chair of United Capital’s audit and governance board. 

During his time at CBN, he led initiatives such as the Cashless Nigeria Initiative, the Bank Verification Number (BVN) project, and the Treasury Single Account (TSA) for the Federal Government. He also led efforts to automate foreign currency payments for the Central Bank’s internal and external customers.

The fintech has also appointed Tosin Faniro-Dada, a partner at Breega, an early-stage VC fund in Europe and Africa, as an independent non-executive director.

“As a company, we’ve gone through different organisational changes in our growth journey, but one thing remains steadfast – our commitment to maintaining the highest regulatory and operational standards,” said Olugbenga Agboola, the CEO and Founder of Flutterwave.

Their appointments come three months after Flutterwave appointed five new executives across its risk, compliance, and expansion departments. Two weeks ago, Flutterwave also added a new board member, Nigerian architect Olajumoke Adenowo, as part of its efforts to drive its international expansion strategy. 

“The company plays a vital role in the fintech ecosystem across Africa. I’m looking forward to supporting the company’s goal of being a model fintech company that advances payment innovations while upholding the highest regulatory and compliance standards,” Fatokun said in a statement.

The merger, subject to regulatory approval, will allow Interswitch to create accounts and hold customer deposits, making it the first time the fintech would offer non-payment services. This follows the fintech’s acquisition of a mobile virtual telecoms licence.

“The PSB use case for these companies (payment companies) is the same: to keep some float of their transaction volumes in-house and consolidate on their already established strengths,” an industry insider told TechCabal. 

“A PSB is the sensible consolidation for them (Interswitch) even if it means they bank themselves,” he added. 

Interswitch declined to comment on any part of this story.

With the PSB licence, Interswitch, which brought in $42 million in revenue for its 2023 fiscal year that ended March 31, will be able to receive foreign currencies for its customers and directly offer agency banking services.

Nevertheless, Interswitch has to offer innovative services to convince Nigerians, famous for user inertia, to use its remittance or agency banking services. Interswitch’s tenured presence in Nigeria, where it derives 94% of its revenue, would be useful.

The CBN introduced regulations for payment service banks in 2018 with a remit to increase financial inclusion in rural. Those license holders are to offer 25% of physical activity in “rural areas with a high unbanked population.”

Interswitch, which derives most of its revenue from offering services to its banking customers, will have to invest in a nationwide physical network of agents. 

Mobile money operators are also limited from participating in the revenue-driving segments of other banks, as they cannot directly give out loans, hold foreign currency deposits or participate in foreign exchange transactions except for receiving remittances. These restrictions severely affect the attractiveness of PSBs in Nigeria.

“It’s been a cocktail of highs, lows, victories and failures, hitting milestones, losing milestones, all wrapped up in a story of resilience with the ultimate satisfaction of solving payment problems for our customers,” Abifarin wrote in a LinkedIn post on Tuesday. 

Her resignation comes after other high-profile employees like Oneal Bhambani, the former chief financial officer, and Ted Oladele, a former vice president of design and innovation, left the company in recent months. Jimmy Ku, the company’s head of growth for the United States, also left the company in February. 

Abifarin joined Flutterwave after 15 years at KPMG Nigeria, where she was an associate director. With almost two decades of experience, she built Flutterwave’s operations, including internal processes, as it attained unicorn status and helped steady the ship through a series of allegations against its leadership in 2022.

“Since our inception, Bode has been the heartbeat of our operations, infusing her passion and dedication into every aspect at Flutterwave,” Gbenga Agboola, Flutterwave’s CEO, said in a LinkedIn post. She will “continue to nurture new businesses” and “focus on building, teaching and education,” after leaving Flutterwave. 

Abifarin’s exit comes as the payment giant touts itself as an IPO candidate with a rumoured listing that has been in the works since 2022.

Although the recent exit of high-profile employees raises questions about these stock listing plans, the startup has made progress on other fronts. After a tumultuous fraud allegation by Kenyan authorities, Flutterwave has been cleared of financial impropriety in the East African country, which threatened to dent its reputation. The startup also hired five new executives across its risk, compliance, and expansion departments one month after Bhambani left the company. 

Two weeks ago, Flutterwave also added a new board member, Nigerian architect Olajumoke Adenowo, as part of its efforts to drive its international expansion strategy. The startup is also reassessing its product strategy. Last year, it relaunched its international remittances product, Send App, and launched other offerings to help local businesses swap international currencies. Last week, the company shut down the struggling Barter, a virtual card and international payments service it launched in 2017, as it trimmed its focus on the more successful Send App, which has fueled growth.

“The company is investigating the launch of a low level of capital expenditure virtual telecoms model using the license, combining payments and telecoms services to B2B customers and consumers,” read the company’s financial report. 

Nigeria, Africa’s largest phone market, awards MVNOs on a tiered basis, specifying the services they can provide. Interswitch, which has the highest tier licence—the Tier 5 (unified virtual operator) license— can negotiate with one of Nigeria’s four telcos and provide asset-light telecom services in underserved areas. 

Interswitch will ride on the infrastructure of its telco partner to bring value-added services to consumer segments that have been ignored or underserved by the telcos. 

With this license, Interswitch can provide cheaper 4G or 5G services to Nigerians or provide telecommunication services to rural areas. 

Last year, the country’s telco sector witnessed a decline in growth—its first in 5 years— after foreign investment declined, which led to reduced capital expenditure from Nigeria’s existing telcos. 

The NCC issued 25 MNVO licenses in 2023 as it looked to increase competition in Nigeria’s telco sector. Nigeria is home to 200 million people, but only 60% of the population can access mobile connectivity, while less than 5% have access to 4G, and 0.8% have access to 5G. 

The payment startup would rely on its access to a large base of customers—Interswitch, through Verve, has issued more than 50 million debit cards—to offer an alternative to the entrenched options that Nigeria has in telecommunications. 

Interswitch would have to offer improved telecommunications services to its customers and carefully select a telco to partner with it to capture market share in Nigeria’s mobile sector, which is estimated to have more than 200 million subscribers. 

The payments startup would also have to introduce innovative ways of communicating and value-added services if it hopes to compete in Nigeria’s telco sector. 

“Immediate corrective action is imperative to rectify Uber’s non-compliance with the Data Sharing Agreement and API integration of the state,” said Oluwaseun Osiyemi, the Lagos state commissioner of transportation.

Citing security concerns, Osiyemi argued that having access to trip information was for the “well-being of all Lagos State residents.” 

“In all markets that we operate in, and Nigeria is no exception, we are committed to being compliant with regulatory requirements,” an Uber spokesperson told TechCabal via email. 

“We have met Lagos State’s regulatory obligations, including an annual fee, per-trip levy and data sharing requirements,” the same person said.  

The 2020 agreement followed months of conversation between ride-hailing companies and the Lagos state government on the need for regulation. These regulations are not unique to Nigeria; in 2016, Uber disclosed that it shared the data of 11.6 million passengers and 600,000 drivers with state and local regulatory authorities. The company has previously argued that some of those data points were more than regulators needed to do their jobs. 

But it often has little leeway when it comes up against governments. In 2020, it agreed, alongside other operators in Nigeria, to pay ₦25 million in annual license fees and ₦20 on each trip as a road improvement levy. 

It was a better outcome than motorcycle-hailing startups like Gokada and ORide got, with new regulations banning commercial motorcycles under 200cc on highways, essentially wiping out an entire business segment. 

For now, Uber will need to engage the Lagos state government, something it has adequate experience in. 

“We have been a committed ride-hailing player in Nigeria for the past 8 years and are keen to continue raising the industry bar on mobility.” 

Adewuyi, a former product lead at Paystack, is GoLemon’s CEO, while Gbade-Oyelakin, who led Paystack’s core platforms team, is the CTO. Jogbojogbo, a marketing lead at Paystack, will lead the startup’s growth, while Showemimo, one of the first ten employees at Paystack, will lead operations. 

The startup delivers groceries and household items to homes and businesses and will compete with other deep-pocketed companies like Glovo and Chowdeck, a YC-backed company. Competitors like Mano and Pricepally are also popular choices for grocery delivery in Lagos.

GoLemon’s entry into the market comes months after international giants like Jumia and Bolt exited the food and grocery delivery segment last year.

Francis Dufay, Jumia’s CEO, blamed challenging unit economics, big losses (Jumia Food never turned a profit in any of the 11 countries it operated in), and increasing competition for the decision to shut down Jumia Food. 

And while some big players are beating a retreat, Jogbojogbo believes this is the best time to start a grocery delivery business. 

“It’s difficult to get started right now and get traction but if we can weather the storm right now, I think we would have been able to build a formidable business,” Jogbojogbo told TechCabal on a call. 

He added that the team will rely on Showemimo’s experience as a supermarket owner in Lagos and Gbade-Oyelakin’s experience as head of engineering at Supermart, an online supermarket, to build the business. 

GoLemon’s unique proposition 

GoLemon manages its inventory and fulfillment centres, directly sourcing its bulk products from farmers and FMCGs. Jogbojogbo told TechCabal that while GoLemon might have competition in aspects of its product offerings, it does not have an “end-to-end competitor.” 

The startup has built a sourcing network connected directly to farmers and manufacturers and optimises for the lowest costs possible to attract a wide customer base. The startup mostly caters to large orders and was “intentionally designed around people who make repeat orders, repeat purchases and large basket size orders,” Jogbojogbo said.

The launch comes weeks after a former Flutterwave vice-president launched Mira, a foodtech startup. YC has also increasingly backed foodtech startups, even as it scales back its presence on the continent.

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“The decision to sunset Barter was based on a comprehensive analysis of market trends and evolving customer needs,” the fintech shared in a mail with TechCabal. 

Flutterwave is doubling down on proven winners by focusing on remittance and enterprise. In October, the fintech told TechCabal enterprise services was its biggest revenue driver. In comparison, Barter only accounted for about 1% of the company’s $2 billion-worth transactions, one of the company’s cofounders told Quartz Africa in 2018. 

“While retail remains important to us, our immediate focus is optimizing services for businesses and remittance solutions,” the company said.

Meanwhile, Flutterwave’s remittance products, Send and Swap, aim to capture a significant market share in Africa’s $54 billion remittance market. It is unclear how much progress both products have made. 

Read also: Flutterwave’s new product Swap wants to solve Nigeria’s FX problems

Barter is a storied product. When it launched in 2017, it was one of the first tech startups to offer Nigerians the ability to make international payments. 

“Barter will leverage on Flutterwave’s virtual card API and platform to allow users create an unlimited number of virtual dollar cards for single or repeat transactions,” said a TechCabal Daily announcing its launch in March 2017. But the product has seen its share of troubles.

In 2022, Barter was unavailable for weeks because of “an update from the company’s card partner.”That partner was Union54, the Zambian card issuer that got hit with a $1.2 billion chargeback fraud attempt.

Customers also complained about downtime issues with the platform and card rejections by merchants, including Netflix, Facebook, PayPal and Apple Music. 

Read also: Flutterwave appoints Olajumoke Adenowo as board member as fintech giant pursues international expansion