P1 Ventures, an African-focused venture firm, has successfully achieved the initial closing of its second fund, securing $25 million in investments. This significant capital influx originated from a diverse base of investors, including major African industrial conglomerates, private companies, funds, and general partners of global funds based in the U.S. and Europe. Mikael Hajjar, Founder and General Partner of P1 Ventures, anticipates completing the fundraising for this second fund by early next year. Founded in 2020 by Mikael Hajjar and Hisham Halbouny, P1 Ventures initially managed an $11 million first fund, which primarily focused on sectors such as e-commerce, fintech, health tech, and SaaS. With its second investment vehicle, the institutional venture fund plans to maintain its commitment to these key industries while strategically incorporating Artificial Intelligence (AI) into its investment thesis.

The firm's initial AI investment is in Nkoloso.ai, a Zambian startup that leverages satellite imagery and AI to collect data and monitor agricultural land. This investment is one of two AI startups and five portfolio companies supported by the Dubai-based venture capital firm from its second fund. Hajjar firmly believes that the integration of AI, particularly in agriculture and fast-moving consumer goods (FMCG), highlights Africa's immense potential to harness this emerging technology. He envisions AI enabling the continent to bypass traditional infrastructure, much like how mobile money revolutionized and surpassed the need for debit and credit card infrastructure in Africa. Moreover, AI presents an avenue for African companies to develop products with global impact. Hajjar stated, "We believe that AI will be Africa’s next big leapfrog opportunity, just as fintech transformed the continent and disrupted the banking sector. We believe AI will have a similar impact on sectors like retail, healthcare, and the creative economy." He further emphasized that the most promising aspect of AI lies in its potential for global expansion, offering a solution to risks associated with operating within a single African market and mitigating currency fluctuations by fostering export-oriented businesses. He cited examples like Instabug, an Egyptian-born software company, and InstaDeep, a subsidiary of BioNTech, both African-founded AI companies successfully serving a global customer base in the U.S., Europe, and beyond.

P1 Ventures, which maintains offices in both Lagos and Cairo, has also recently launched an Entrepreneur-In-Residence (EIR) program. This program has played a crucial role in helping Nkoloso.ai secure financial backing. The two partners, drawing upon their extensive skills and experience as former industry operators, oversee this venture studio. The strategic objective of the studio is to cultivate an additional four startups over the next four years, led by founders demonstrating the capacity to achieve product-market fit and successfully scale their offerings.

Speaking with TechCrunch, Hajjar articulated P1 Ventures' distinctive investment philosophy: "We go off the beaten path and back the underdogs; we invest where no one else does." This approach is exemplified by the early investments made by P1 Ventures' first fund in nascent startups operating within French-speaking African markets. These include Yassir, a mobility startup from Algeria that evolved into a super app; Chari, a B2B e-commerce platform based in Morocco; and Djamo, a payment startup in the Ivory Coast. These pioneering enterprises have since become the best-funded startups in their respective nations. Notably, Yassir, as P1 Ventures' inaugural investment, stands out as one of the most valuable startups across both Africa and the Middle East.

While P1 Ventures primarily focuses on seed-stage investments, it identifies itself as a multistage investor, selectively participating in Series A and B funding rounds when opportune. Despite the relatively modest size of its initial fund, P1 Ventures has provided smaller investments in later expansion stages for companies such as Yassir and the Egyptian fintech MoneyFellows. Hajjar attributes this notable participation to the company’s institutional track record. He underscored the importance of stage and geographical differences in their investment strategy and highlighted their proactive involvement in assisting portfolio companies with securing follow-on investments, attracting top talent, and formulating effective expansion strategies. The General Partner at P1 Ventures emphasized the rarity of African General Partners (GPs) possessing an institutional track record, which furnishes the firm with invaluable insights for cultivating category-defining businesses. This expertise has informed strategic decisions, such as choosing to invest in Chari at the pre-seed stage over other more prominent B2B e-commerce opportunities in Egypt and Nigeria, and opting for MoneyFellows at Series A rather than other early-stage fintechs at comparable valuations in Egypt. Furthermore, P1 Ventures played a pivotal role in facilitating MoneyFellows' connection with CommerzVentures for its Series B funding round and has actively supported Chari through various acquisitions over the past two years.