Tech Startups in Africa's “Big Four” markets—Nigeria, Kenya, Egypt, and South Africa—accounted for 92.13% of all investment raised on the continent in the first six months of this year, according to BD Funding Tracker.

According to Peter Oriaifo, Principal at Oui Capital, "In uncertain times, investors will seek to de-risk an already risky investment by concentrating capital in markets where the revenue opportunity is exponentially large, capital will concentrate further on the big four markets."

However, this US-based VC firm is taking a different route. Black Ostrich Ventures has launched a $20 million fund to invest in early-stage startups outside of the “Big Four” bubble. The firm said it will focus its investments in Tanzania, Zambia, Morocco, and Uganda.

“If you look at the capital inflows into VC in Africa, the Big Four countries—Nigeria, South Africa, Egypt, and Kenya—attract all the capital. But most exits do not happen in these markets,” says Ajani Windsor-Areago, General Partner of Black Ostrich Ventures.

“A lot of the Western VCs invest in Africa without having an exit strategy. There's no IPO for you. What a lot of VCs in the West do not understand is that when a company reaches Series A in Africa, that's an exit for someone who invested in the pre-seed,” Windsor-Areago told Techpoint Africa, a few months ago.

“I'm speaking to a lot of the African VCs and they're teaching us how to exit businesses on the continent,” he said. Black Ostrich Ventures will provide cheques ranging from $50,000 to $200,000, with a follow-on investment of about $1 million for Series A rounds. The fund is backed by LPs in New York and undisclosed high-net-worth individuals in Los Angeles.

These cheques will be directed to startups in the following sectors; cleantech, supply chain, agritech, and edtech. This is another diversion from the sectors, like fintech, that have been receiving most of the attention on the continent.

“We will be working with founders in a very unusual way. We’re going to surround founders with growth experts and marketing experts to help them grow their businesses. It’s one thing to be great at starting a company, understanding the marketing aspect of the business is another,” he added.  

In May, Windsor-Areago launched a startup advisory firm, White Umbrella Ventures. Based in Los Angeles and San Francisco, White Umbrella Ventures helps grow startups by offering support from fundraising-as-a-service to marketing, advisory, and sales.

He currently sits on the board of two Ugandan and Morrocan startups that are operating in the media and social commerce sectors respectively. He previously worked at Lagos-based VC firm, Platform Capital and Expert Dojo, another US-based firm that invests in Africa.