Granite Global principal sets sights on Africa

Yemi Lalude, a principal at Granite Global Ventures, is leaving the firm to start a new firm called Adlevo Capital that will invest in Nigeria and South Africa.

Lalude hopes to raise an inaugural fund of $75 million to invest in a wide variety of high-growth businesses that already have products and revenue. On average, he expects to invest $3 million to $4 million per company.

“People think writing a $100,000 check in Africa will do, but not in Nigeria,” Lalude says. “It’s not microfinance.”

The managing directors of Granite have been supportive of Lalude’s move and have promised to personally invest in his fund, according to sources. Lalude would not say what kinds of LPs he expects to target or when he will start fund-raising. He has set up a placeholder website at www.adlevocapital.com.

People think writing a $100,000 check in Africa will do, but not in Nigeria. It’s not microfinance.

Yemi Lalude, Principal, Granite Global Ventures

Few venture funds have taken advantage of the opportunities in Africa. Venture firms have invested $900 million in 247 companies in Africa over the last five years, according to Thomson Financial (publisher of VCJ). Even firms that are expanding worldwide are not hurrying to get to the continent.

“Africa is something we’re going to pay attention to,” says Draper Fisher Jurvetson Managing Director Don Wood. “South Africa might make the most sense.” He adds, however, that DFJ has no current plans to open an affiliate anywhere in Africa.

Recently, Emerging Markets Partnership of Washington, D.C., closed its second Africa fund with more than $520 million in capital. Fund I raised $350 million in 2002. The firm, which also invests in Korea and Argentina, seeks minority or majority positions in companies throughout Africa, with a focus on Nigeria, South Africa, Egypt and Kenya.

Some VCs focused on Africa invest in emerging wireless communications infrastructure projects, such as the $87.4 million Nigerian telecom company Starcomms raised in two rounds from Actis Capital and the Emerging Markets Partnership. Others invest on a much smaller scale. Consider Venture Partners Botswana, which invests $36.7 million on behalf of the government-run Citizen Entrepreneurial Development Agency Venture Capital Fund. The firm invests an average of $1 million in each of its startups. It invested $710,000 in Builders Merchants Botswana, a supplier of home building materials, in 2005. —Alexander Haislip