Japanese VC Samurai Incubate closes $18.6 million fund for African startups

Tokyo-based venture capital firm, Samurai Incubate disclosed on Friday that it has closed its “Samurai Africa 2nd General Partnership” fund.

The VC firm raised a total of 2.026 billion yen (approximately $18.6 million). It said that the fund was oversubscribed, slightly going over the estimated $2 billion (approx. $18.4 million). A total of 54 investors, including Toyota Tsusho Corporation, joined as LPs.

Samurai Incubate was founded by Kentaro Sakakibara. It took a special interest in Africa and began investing in the continent by 2018 through its subsidiary Leapfrog Ventures. In August 2018, Samurai invested $2.5 million in 20 African startups. By June 2019, it renamed the newly launched firm Samurai Incubate Africa.

“Throughout our journey, we have focused on refining and optimizing our operating approach to maximize our value proposition to founders,” the firm wrote in a statement. “However, we might not always have been perfect. We believe that the value we bring should go beyond capital and access to Japanese investors and corporations.

Samurai Incubate Africa has since invested in 26 companies, with 6 from the second fund comprising of online marketplace Evolve Credit, tech-enabled home service startup Eden Life, freight forwarding company Oneport, energy startup Shyft Power Solutions, online grocery platform Pricepally, and microfinance services for car lenders FMG. Most of Samurai Incubator’s beneficiaries are from Nigeria, Kenya, and South Africa.

Rena Yoneyama, the managing partner at the VC firm said it is including Egypt in the list of its target countries.

“Egyptian startup ecosystem and its economy is rapidly expanding and we got to know that there are many talented founders and great investors in the country as well,” Yoneyama told TechCrunch. “We already decided to make one investment into an Egyptian startup, and we know we’ll never regret it.”

When the Venture Capital firm first announced this second fund in 2020, its range was between $50,000 to $500,000. Usually, for pre-seed to seed rounds startups got around $200,000 or less. While for pre-Series A and Series A rounds, they received not more than $500,000. Upon successfully closing the fund, Samurai has extended the investment maximum to $500,000.

“We would like to support our portfolio companies’ pre-series A and series A raises as an existing investor. To do so, we thought it would be better to increase the ticket size considering the recent round size and valuation of companies,” Yoneyama added.

The company says it plans to invest in 30 to 40 startups at the pre-seed and seed levels. It also plans a follow-up on pre-Series A and Series A investments in 7 to 10 existing portfolio companies.