Xecced Ventures to invest in African startups through $100m Industry 4.0 fund

Is your startup building solutions for the Fourth Industrial Revolution and looking for funding?

London-based venture capital (VC) firm Xecced Ventures is looking to make investments of between $500 000 and $5-million in Industry 4.0 startups — through its $100-million Africa-focused 4thIRiA I Fund.

Industry 4.0 technologies include artificial intelligence (AI) and machine learning, cloud computing, the Internet of Things (IoT), the Industrial Internet of Things (IIoT) and cognitive computing.

Xecced Ventures principal Ibrahim Sanusi (pictured above), who is also the VC firm’s point man in Africa, said the fund made its first fundraising close last month at $70-million. He added that the fund is in the process of closing its first investment.

Xecced Ventures is exploring co-investment synergies with the Tony Elumelu Foundation

The VC firm was spun out of think tank Xecced LLP last year by partner Muhtari Adanan and CIO James Rutley.

Outside London, Xecced Ventures has offices in California in the US and is in the process of moving its Abuja office to Addis Ababa in Ethiopia.

The firm also claims it has proxies in “most African countries”.

Sanusi explains that the fund is “unique” in the impact investing ecosystem as it invests in pre-seed to Series-B stages of Industry 4.0 African startups.

“The ultimate goal is to mitigate against the impact of Industry 4.0 on Africa, for example 85% of jobs in Ethiopia risk being lost to Industry 4.0 according to a study,” said Sanusi.

Sanusi said the VC firm sources deals by scouring the internet using AI as well as by building ecosystem, system dynamics and predictive models.

In addition, Xecced Ventures also makes use of scouts as well as public and private partnerships. Sanusi said the firm is exploring “co-investment synergies” with the Tony Elumelu Foundation.

‘Approach indication of founders’ sophistication’

Startups looking to tap funding from the VC will have to think carefully about how they go about it.

Sanusi pointed out that how a startup approaches Xecced Ventures gives the firm “some indication” of the founders’ sophistication and resourcefulness.

He explained that when considering potential investments, the impact investor evaluates economic and social impact as well as return on investment in the context of the unfolding Fourth Industrial revolution.

“Most development gurus believe Africa has less than seven to 10 years leeway before the Fourth Industrial Revolution closes the window of opportunity for Africa to execute the inclusive growth playbook used by North East Asian countries to rapidly industrialise,” said Sanusi.

He added that the VC firm prioritises female entrepreneurship and also places added emphasis on inclusion, equity and equality.

Xecced Ventures investees stand to benefit from access to Xecced LLP which Sanusi said has built an in-house accelerator.

Featured image: Xecced Ventures principal Ibrahim Sanusi (Supplied)