DPI has for nearly two decades offered growth equity to African businesses focused on financial inclusion, healthcare services and supply chain efficiency. The London and Cairo-based investment firm is finding appetite from commercial investors to invest down-market, in earlier-stage and tech-focused businesses.
The firm has acquired Egypt-based fintech fund manager Nclude to anchor its new venture capital group, DPI Venture Capital. Through the deal, DPI adds Mastercard, Egypt’s e-Finance Investment Group, and the Egyptian Banks Company to its roster of limited partners.
“We’re very proud that the LP base is highly commercial, because that shows that financial inclusion and financial access at the VC level is top of mind by these commercial players,” Ashley Lewis, who leads the new investment unit, told ImpactAlpha (see, “Africa’s biggest bank turns to fintech to extend lending to informal businesses”).
Fintech strategy
DPI Venture Capital will make seed to Series C investments in tech companies enabling access to financial services for small businesses and underserved consumers. The team will focus on Nclude’s home market of Egypt and allocate 30% of its capital to other parts of Africa and the Middle East.
The fintech VC strategy has been in the works since DPI closed its third private equity fund at $900 million in 2021. At the time, African fintech was booming along with the rest of the global venture capital sector. Investment in the sector tanked last year, but demand for better, cheaper and more accessible financial services still creates opportunities (see, “How responsible fintech in Africa provides resilience in a downturn”).
“There is still room for innovation, and there’s still room to back companies that are [making] a difference,” Lewis said. DPI invested via its third private equity fund in MNT-Halan’s $157 million growth round, one of North Africa’s biggest fintech deals last year.
Strategic investors
Nclude was launched in 2022 as a strategic investment initiative of three Egyptian banks: Banque Misr, National Bank of Egypt and Banque du Caire. Commercial interest in the fintech sector picked up in Egypt that year after the central bank adopted a national financial inclusion strategy.
It recently mandated that commercial banks designate 25% of their portfolios to micro, small and medium-sized enterprises for at least one year.
As part of DPI, the fund opens up opportunities for strategic investment and collaboration with a broader set of financial services companies, Lewis said. “A few years back, as an ecosystem, it was more development finance institution-heavy. We’re starting to see a much more diverse range of LPs.”
