After eight years advising startups, Irtus Consolidated now wants to fund them

After eight years of advising startups and small and medium-sized enterprises (SMEs), Irtus Consolidated is moving into private capital, seeking to raise between $15 million and $20 million to invest in businesses it believes can capture large sections of Nigeria’s economy.

Tamara Posibi, CEO of Irtus Consolidated, said the move represents a natural progression for the firm after years of working closely with founders, tracking the performance of their businesses and observing the challenges confronting early-stage companies.

The firm, established in 2018, began primarily as an advisory business supporting founders with business formation, growth strategy and fundraising. It has since expanded into areas including audit and an accelerator programme designed to provide founders with knowledge, networks and community support.

Its next step is to put capital behind some of the businesses it has spent years advising.

“We have seen the trajectory and growth of companies. We have seen what happens to businesses at different stages, and we have also looked closely at what the market and the broader economy are saying about startups and SMEs. What that has shown us is that there is an opportunity to provide more than advisory support,” Posibi told BusinessDay.

According to Posibi, the firm’s decision to become an investor has been driven partly by the data it has accumulated from working with businesses over several years. Rather than entering the market solely in response to the current funding squeeze, Irtus Consolidated wants to use its experience of monitoring businesses to identify companies that may require capital to move from an early stage of development to significant scale.

“We have seen your trajectory, we understand your business and we believe you can become significantly bigger with the right financial push,” she said.

The strategy comes at a time when access to venture funding has become more challenging for many early-stage African startups, with investors increasingly placing greater emphasis on proven business models, traction, revenue and the ability to demonstrate a path to returns.

For early-stage companies, that creates a difficult funding gap. Businesses may have viable products, growing markets and strong founders but may not yet have the scale or track record required by institutional investors.

Posibi said Irtus Consolidated wants to operate in that gap by combining its advisory experience with direct financial backing.

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The distinction is important to the firm’s emerging investment model. Traditional investors typically provide capital in exchange for equity or through debt arrangements, with the level of post-investment involvement varying by investor. Irtus Consolidated intends to build on the support infrastructure it has already developed through its advisory and accelerator businesses.

“We want to be one of the institutions willing to back those businesses at that stage and take that chance on them,” Posibi said.

The company is therefore positioning itself not simply as a source of funding but as an active growth partner.

That approach is intended to address one of the problems that can make early-stage investing particularly risky: capital alone does not necessarily solve weaknesses in strategy, market understanding, governance, financial management or execution.

Irtus Consolidated’s experience working with startups and SMEs gives it an opportunity to identify some of those weaknesses before or during the investment process.

Posibi said the firm’s model will combine monitoring, advisory support and capital as it works with businesses.

“We are not simply coming in, giving a business money and leaving the founders to figure everything out themselves,” she said.

The firm plans to use a combination of equity and debt depending on the needs and financial characteristics of each business.

Posibi said the two instruments serve different purposes and that the firm will determine the appropriate structure based on individual businesses rather than applying a single financing model across its portfolio.

Irtus Consolidated is currently raising its first fund, targeting between $15 million and $20 million.

Posibi declined to disclose the investors or capital partners involved in the fundraising process, saying the firm is particularly interested in working with partners who understand the Nigerian and African markets.

The initial raise is expected to provide the firm with an opportunity to deploy capital, monitor its investments and demonstrate that its investment model works before scaling further.

For a first-time fund manager, proving that model will be critical.

Posibi acknowledged that raising capital as a first-time manager has been a learning experience, particularly because fund management involves practical challenges that cannot always be fully understood from theory.

She said the firm has also benefited from a community of other fund managers who have provided guidance during the process.

“You start with an idea or a thesis, but it gets tested repeatedly as you engage with investors, the market and the businesses you are looking to support,” she said.

The willingness to refine the investment model as the firm gains experience is likely to be important as it moves from advisory services into managing external capital.

Irtus Consolidated is not limiting its investment strategy to a single technology sector.

Instead, its investment thesis is centred on businesses capable of serving large populations and capturing meaningful market share.

Posibi said the firm is particularly interested in opportunities linked to the needs of Nigeria’s large and growing population.

Financial services, payments and energy are among the areas the firm expects to examine, although the strategy is broader than those sectors.

The common denominator is the size of the market that a business can address.

“We are interested in businesses operating in areas where there is a large addressable market and the potential to reach millions of people,” Posibi said.

This approach reflects a view that some of Africa’s most significant investment opportunities may lie outside the relatively narrow group of startups that have already attracted substantial venture capital.

Rather than competing exclusively for established technology companies with demonstrated traction, Irtus Consolidated is looking for businesses that can build solutions for large, underserved or fragmented markets.

That includes businesses serving the informal economy, which remains a major part of economic activity across Nigeria.

Why early-stage businesses matter

Posibi said the firm’s strategy is also rooted in its view of the importance of SMEs to Nigeria’s economy, particularly their role in employment and economic activity.

While larger startups often attract investor attention because they have already demonstrated their ability to scale, smaller companies can face difficulty obtaining the capital required to reach that stage.

For Irtus Consolidated, the opportunity lies partly in identifying those businesses before they become obvious investment targets.

The firm believes that early intervention through advisory services, community support and capital can improve the prospects of companies that might otherwise struggle to cross the gap between being a promising small business and becoming a larger, institutional-grade company.

Posibi said the first five years of an SME’s life are particularly important. “If a business is able to survive and establish itself through those early years, its chances of building a sustainable company improve significantly,” she said.

This is where the firm’s existing advisory business could become an advantage.

Having worked with founders for years, Irtus Consolidated can potentially use its accumulated knowledge of businesses, founders and markets as part of its investment screening and monitoring process.

The firm’s proposed model therefore creates a continuum: advisory support at the early stage, accelerator and community support as the business develops, followed by capital for companies that meet its investment criteria.

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Over the next five years, Posibi said Irtus Consolidated expects its strategy to remain closely linked to the informal economy and services required by a growing population.

The firm sees financial services, payments and energy as areas where businesses can potentially serve millions of people, while its broader investment thesis is tied to companies capable of addressing large-scale needs.

The population opportunity is central to the firm’s thinking.

Posibi said Africa needs builders capable of creating businesses around the continent’s significant unmet needs and demographic expansion.

“There is a lot of opportunity on the continent,” she said, encouraging entrepreneurs to continue building despite the current difficulties in accessing capital.

For Irtus Consolidated, however, the challenge is not simply finding businesses with large ambitions.

Its investment model will have to demonstrate that it can identify viable businesses early enough, provide the right combination of capital and operational support, and ultimately generate returns for the investors providing the fund’s capital.

That will determine whether its transition from adviser to investor can become a scalable business in its own right.

For now, the firm is betting that eight years spent close to founders have given it an information advantage and that this experience can help it find and support businesses before they become the next obvious investment targets.

Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.