Japan’s Samurai Incubate launches new $18M fund for African startups

From left: Hironari Kubo (Senior Manager / Fund Controller, Samurai Incubate), Rena Yoneyama (Senior Manager, Samurai Incubate / Managing Partner, Samurari Incubate Africa), Kentaro Sakakibara (CEO, Samurai Incubate / CEO, Samurai Incubate Africa), Nao Koike (Manager, Samurai Incubate), Yoshihiro Honma (Executive Officer, Corporate Group, Samurai Incubate)
Image credit: Samurai Incubate

Thursday, 6pm JST – Update: Minor correction applied into Yoneyama’s previous position, Samurai Africa Fund II’s targeted geographical markets, and my misunderstanding that the first fund’s investment capacity is still remaining.

Tokyo-based VC firm Samurai Incubate announced on Thursday that it has launched a new fund focused on starups in Kenya, South Africa, and Nigeria. The fund is titled Samurai Africa Fund II, aiming to acquire 2 billion yen (about $18.3 million US) for investments. As for the ticket sizes, the fund invests a minimum cheque size of 5 million to 50 million yen (about $46,000 to $460,000 US) for startups in the seed to series A stage while targeted verticals are FinTech / InsureTech, logistics, MedTech / healthcare, retail and e-commerce, AgriTech, transport and mobility, and entertainment.

Since the fund is called in that way, some of our readers may be wondering when its first fund was formed, but it seems to refer to Leapfrog Ventures, a seed-stage fund jointly launched in May of 2018 by Samurai Incubate and its former employee Takuma Terakubo. According to their corporate history, the firm rebranded Leapfrog Ventures into Samurai Incubate Africa back in June of 2019.

As of June last year when the African investment vehicle was rebranded, we can confirm Terakubo was still serving the company as CEO at that time but Samurai Incubate CEO Kentaro Sakakibara has taken over the position by now. With all these facts, we can understand that the vehicle has become a wholly owned subsidiary of Samurai Incubate for their startup investments in Africa. According to reliable sources, Terakubo is currently preparing for his own new fund for African startups. We’ll keep you updated about his progress when it becomes available.

Rena Yoneyama, Managing Partner of Samurai Incubate Africa, will play a management role for the second fund. Prior to Samurai Incubate, she previously worked with the Development Bank of Japan and the Japan Bank for International Cooperation followed by serving Japan International Cooperation Agency (JICA) Moroccan office as an assistant Project Formulation Manager and Tokyo-based Techfund as a director. Samurai Incubate Africa is commissioned by JICA to conduct research on promoting entrepreneurship and finding out the local startup ecosystem in Africa. The firm says the work doesn’t in any way imply in evaluating the fund.

The first fund has chosen Rwanda, Kenya, Tanzania, Uganda and South Africa as the geographical region as their focus while Rwanda, Uganda and Tanzania are removed and Nigeria is added for that of the second fund.

(The firm told Bridge that they are NOT intended to remove Rwanda, Uganda and Tanzania from their targeted geographical markets.)

Seeing a remarkable growth, Nigeria boasts the largest market in the Sub-Saharan region. With this in mind, it seems that Samurai Incubate Africa has re-shuffled their targeting markets to put the limited resources into places with the potential largest output. At the time of launching the first fund, they said they were aiming to invest in about 80 startups. It has now become clear that they have invested in 18 companies in Africa, which is equivalent to about a quarter of the initial target.

The first fund was so far invested in the Senri sales optimization platform for manufacturing and distribution businesses in Africa, Kenya-based sales bot and SaaS startup Biashara, and Rwandan regional FinTech startup Exuus. The first fund appears to have investment capacity remaining, but it is still unclear whether the fund’s focused investment region will remain the same or will follow the second one.

(In addition to 500 million yen as the initial target size of Leapfrog Ventures, Samurai Africa Fund I incorporated 10% of Samurai Incubate Fund VI (3.45 billion yen) which was launched back in February last year. The first Africa fund has no further investment capacity remaining since it has completed investing. We can assume the ticket size per startup was larger than initially expected while the number of investees is less than a quarter of their initial target.)

In this area, there are some companies in Japan offering corporate advisory and startup support initiatives in Africa, such as Tokyo-based Double Feather Partners.

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