Breega, one of the fastest-growing early stage funds in Europe, recently launched its first African fund, “Breega Africa Seed I”, which aims to become the leading early-stage investor in African startups and bridge the gap between equity and experience by providing founders with support that goes beyond capital.
That’s according to Tosin Faniro-Dada, partner at Breega, who was speaking as part of episode 18 of Disrupt Africa “The month in VC” podcast series, powered by Atlantica Ventures and Goodwell Investments.
“Breega was built to provide founders with the support we wish we’d had as entrepreneurs. We wanted to bridge the equity and experience gap,” she said.
Faniro-Dada grew up in Nigeria, but moved to the United States for college, where she obtained a BSc and a MSc in Accounting and started her career at PwC in Boston. In 2010, she moved back to Nigeria to work as an investment professional at ARM Investment Managers, and she subsequently joined Skye Bank (now Polaris Bank) in the Corporate Banking division.
“My journey with entrepreneurs began when I joined the Lagos State Employment Trust Fund (LSETF),” she said.
“This experience solidified my belief that entrepreneurs and their businesses are key to creating jobs and wealth in emerging economies. I am passionate about supporting entrepreneurs and connecting them to resources to help them scale.”
After the LSETF, Faniro-Dada moved on to supporting growth-stage companies as managing director and CEO of Endeavor Nigeria, before joining Breega in 2023.
Since closing its first fund in 2015, the Paris-based Breega, which also has offices in London and Barcelona, has reached US$700 million in assets under management, invested in over 100 startups across 15 countries. a has now opened two new offices, in Lagos, Nigeria, and Cape Town, South Africa, to manage its new pan-African fund “Breega Africa Seed I”.
Faniro-Dada said Breega was built to provide founders with the support its founders wished they had had as entrepreneurs. It has built a team of investors that were formerly founders or startup operators, as well as a scaling team of vertical experts to help its startups scale.
“Breega goes beyond providing capital, it comes with a solid support system thanks to an investment team that has experienced the struggles and a dedicated scaling team working with founders on a daily basis,” she said.
Breega has a large community of LPs, composed of entrepreneurs and industry leaders, family offices, large financial institutions such as public and private banks, and development banks.
“For the African Fund, we received funding from leading institutions, including Bpifrance, FMO and others, and a range of entrepreneurs, including African HNIs,” Faniro-Dada said.
“We have already invested in nine startups at pre-seed and seed stage across different sectors spanning fintech, energy, and logistics, and a variety of geographies.”
Those startups include the likes of Uganda’s Numida, South Africa’s SAVA, and Nigeria’s Klasha, with Faniro-Dada saying Breega was less focused on specific sectors than the kind of impact a venture would have.
“It’s important that we focus on structuring sectors with the highest impact – fintech, health-tech, prop-tech, logistics, ed-tech – as we’re convinced that tech can be transformational to face the continent’s current challenges and future ones with a fast-growing population,” she said.
Likewise, Breega’s African fund covers several regions, based on their level of technological maturity and the startup ecosystem. These include Nigeria, Egypt, South Africa and Kenya, as well as several French-speaking African countries such as Morocco, Senegal, Ivory Coast, Cameroon, and the DRC.
“Breega’s investment strategy includes intentional investing in untapped markets across Africa, not just focusing on the big four markets, to grow and catalyse ecosystems and create value in regions that may not traditionally receive venture capital attention,” Faniro-Dada said.
She reiterates that what makes Breega unique is the mentorship offered.
“Breega is made up nearly entirely of ex-founders and startup operators, who have been in the same position as the startups they’re investing in. I love connecting founders with resources,” she said.
“I believe that beyond capital, founders need access to the right networks and resources to help them scale. The African entrepreneurs we back benefit from the exact same support from our in-house Scaling Team, that helps them build the foundations for sustainable growth.”
African startups navigate a challenging landscape, she said.
“Limited access to capital plagues many ventures, as the continent’s venture capital ecosystem is still nascent and risk-averse towards early-stage companies. This funding gap restricts growth and scalability,” Faniro-Dada said.
“Furthermore, underdeveloped infrastructure presents significant hurdles. Achieving product-market fit can also be a significant obstacle. Some startups devote resources to solutions that don’t resonate with the most pressing local needs, leading to a dearth of customer demand.”
The current capital shortage, she said, is likely to persist for the next few years.
“Central banks are maintaining higher interest rates to combat inflation, reducing the availability of cheap capital. Additionally, ongoing geopolitical tensions and market uncertainties contribute to a cautious investment climate,” she said.
“However, despite the global downturn and lower VC funding, Africa continues to be an attractive market for many investors and global players. The continent’s untapped potential and the emergence of innovative solutions keep it on the radar, albeit with a more selective investment approach.”
There is a critical need for funds like Breega, Faniro-Dada said, which invest in early-stage companies and have the capacity to provide follow-on funding.
“Such funds are essential for sustaining the growth of innovative startups and ensuring they have the resources to scale,” she said.
“We plan to continue deploying early-stage capital and providing scale-up support to the most exciting entrepreneurs, building high-impact and sustainable innovations across the continent.”
