Tokyo-based venture capital firm Uncovered Fund has partnered with Japanese financial services giant Monex to establish a $20 million investment vehicle targeting startups across Africa and the Middle East. The Uncovered Monex Africa Investment Partnership (UMAIP) represents a significant expansion of Japanese private investment in African technology ecosystems.
Strategic Partnership and Fund Structure
The collaboration builds on an existing relationship between the firms, with Monex previously serving as a limited partner in Uncovered’s earlier funds. Monex, which operates Japan’s largest cryptocurrency exchange alongside traditional financial services, brings substantial institutional backing and financial sector expertise to the partnership.
“Monex was one of our LPs back when I was at my previous firm,” explained Takuma Terakubo, Uncovered’s CEO. “It is a major Japanese financial institution and also operates Japan’s largest crypto exchange. They have long been interested in investing in Africa and are looking to leverage Japan’s financial strength to support African fintech and crypto-related companies.”
Investment Strategy and Portfolio Approach
UMAIP will deploy capital through a structured approach designed to maximize impact across the startup lifecycle:
Initial Investment Phase
- Target 30 companies with initial tickets ranging from $100,000 to $500,000
- Focus on early-stage startups with strong growth potential
- Sector-agnostic approach with strategic preferences
Follow-on Investment Strategy
- Reserve $10 million (50% of total fund) for subsequent funding rounds
- Follow-on investments ranging from $1-2 million per company
- Support portfolio companies through multiple growth stages
Innovative Debt Financing Component
- Leverage Japan’s low interest rate environment to raise debt capital
- Provide debt financing specifically targeting fintech startups
- Offer alternative capital structures beyond traditional equity investments
Sector Focus and Market Opportunities
While maintaining sector flexibility, UMAIP prioritizes industries where African startups can leverage the continent’s scale advantages:
Core Investment Sectors
- Fintech: Payment systems, digital banking, and financial inclusion solutions
- Mobility: Transportation and logistics technology
- Retail: E-commerce and consumer-focused platforms
- Logistics: Supply chain and delivery infrastructure
- Climate Tech: Clean energy and carbon credit solutions
“We focus on businesses that can leverage the scale advantages of Africa’s vast market and population, such as fintech, retail, the supporting logistics sector, and mobility,” Terakubo noted. “We are also paying close attention to climate tech, which can harness Africa’s abundant land and solar potential.”
Japan’s Evolving Africa Investment Strategy
UMAIP reflects Japan’s broader strategic shift from traditional development aid toward sophisticated private investment in African markets. This transition includes several parallel initiatives:
Government-Level Commitments
- Japan-African Development Bank agreement providing $5.5 billion in business loans over three years
- Nigeria-Japan $40 million early-stage startup fund, with 50% funding from Japan International Cooperation Agency
- Systematic approach to de-risked private investment opportunities
Corporate Ecosystem Participation The fund attracted diverse Japanese institutional investors including financial institutions, trading houses, automotive companies, and logistics firms, demonstrating broad corporate interest in African market opportunities.
Geographic Strategy and Market Entry
North African Focus Egypt serves as UMAIP’s primary North African market, chosen for its substantial consumer base and regional expansion potential. “Egypt represents one of the largest markets in Africa with strong consumer purchasing power,” Terakubo explained. “We are focusing on business opportunities expanding from Egypt across the entire MENA region.”
Pan-African Presence Building on Uncovered’s existing portfolio of 29 early-stage African startups across 17 countries, including successful investments in Gozem, Autochek, Termii, Chari, and Yoco.
Japanese Corporate Partnership Platform
A distinctive element of UMAIP involves systematic connection of African startups with Japanese corporate partners through multiple channels:
Showcase Africa Annual Event
- Connects African startups directly with Japanese businesses and investors
- Track record of facilitating relationships between over 500 Japanese businesses and 50 African startups
- Platform for exploring partnerships, acquisitions, and strategic investments
Value-Added Services Beyond Capital “We not only provide access to Japanese technology and business know-how, but also monitor and track the outcomes of these connections to ensure long-term value creation,” Terakubo emphasized.
Climate Tech Integration Specific focus on enabling Japanese companies to trade carbon credits issued by African startups, creating innovative cross-border sustainability partnerships.
Asian M&A Alternative
UMAIP positions itself as an alternative to traditional Western acquisition patterns in African tech markets. “While mergers and acquisitions activity from the US and Europe may be more familiar to African startups, our aim is to bring opportunities for acquisitions from Asian companies, particularly Japanese corporates, into the African ecosystem,” Terakubo stated.
This approach offers African startups access to:
- Japanese corporate expertise and technology transfer
- Alternative exit opportunities through Asian market integration
- Cross-border expansion support into Asian markets
- Long-term strategic partnerships rather than purely financial relationships
Global Expansion Strategy
Beyond Africa and MENA, UMAIP will invest in scalable businesses capable of expanding across Asia and Latin America, reflecting a broader vision of connecting emerging market innovation across multiple continents.
Portfolio Track Record and Learnings
Uncovered’s previous investments in notable African startups including Piggyvest and Lemfi provide valuable experience informing UMAIP’s strategy. The firm’s decision to concentrate on fintech, mobility, logistics, and online retail reflects data-driven insights from its existing portfolio performance and market observations.
This focused approach, combined with Japanese corporate partnership opportunities, positions UMAIP as a distinctive player in Africa’s venture capital ecosystem, offering both capital and unique strategic value through cross-border business development.
