AFRICA – Rali Cap, an early-stage venture capital (vc) firm focused on emerging markets, has launched a US$30 million fund.
Investors who took part in the funding include FT Partners, Breyer Capital, Propel VC, Better Tomorrow Ventures, Bain Capital, Lateral Capital, a few family offices, and HNIs.
The firm invests in B2B and API-first fintechs across Africa, Latin America and South Asia at pre-seed and seed stages. It aims at achieving a second close by the end of June.
The firm, previously known as Rally Cap Ventures, reached its first close of US$20 million (its initial objective) last month before raising the fund size, indicating strong LP interest.
The two-year-old VC fund makes pre-seed and seed investments in B2B and API-first fintechs across Africa, Latin America, and South Asia. It plans to close the second round by the end of June.
Hayden Simmons, the general partner who founded Rali Cap in 2020, says the firm was first a collective before becoming a fund.
“By the end of 2020, we realized our plan was too inactive. We had this incredibly active community of fintech angels, but we believed it was more important to have our own cash to fund our witnessing transactions,” Hayden Simmons- General Partner- Rali Cap said.
“We’ve also seen this with angel investors who have become well-known solo venture capitalists, such as Olumide Soyombo of Voltron Capital and Elad Gil and Lachy Groom worldwide. Our fundamental assumption is that investing in early-stage B2C fintech in these regions doesn’t make sense yet.
Because of Africa’s fragmented character, it’s still too challenging to create B2C products from different regions that target a large enough total addressable market (TAM). APIs offer more efficient market expansion since they can help B2C fintechs underwrite consumers at the last mile, sew together numerous calls, and facilitate cross-regional development.”
Rali cap has invested in 12 African, 13 Latin American, and 7 Asian firms. Belvo, Mono, Minka, Stitch, Union54, Pomelo, Simetrik, Brick, and Abhi are among the companies that offer banking as a service and card issuing and available finance and SME digitalization platforms.
Meanwhile, some of rali cap’s LPs have invested in these firms’ subsequent early- and growth-stage rounds.
On Sydecar, Rali cap runs its collective arm. Its venture capital deal execution software raised US$8.3 million from rali cap and other investors last month. Nick Talreja, the platform’s CEO, also serves as Rali Cap’s legal advisor.
Adia Sowho, MTN Nigeria’s CMO; Rob Eloff, a general partner at Lateral Capital; and Sheel Mohnot, a general partner at Better Tomorrow Ventures, are among the fund’s other strategic advisors.
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