TLG Capital and Future Africa have launched a US$25 million venture debt fund from TLG’s existing funds, earmarked for companies from the Future Africa portfolio who meet specified criteria.
TLG Capital is an investment holding company which focuses on private investment opportunities in SMEs across the capital structure and particularly within the credit space, while Future Africa is an early-stage investor that has so far pumped US$10 million in 97 portfolio companies.
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, they will work on industry maps to design institutional lender-friendly business plans, encourage a laser 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 US$25 million venture debt fund will be the first of its kind and 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 – crucial as venture investors increasingly focus on profitability and cash flow, over 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, investor at TLG Capital.