Breega Raises $52M for $75M Africa-Focused Fund
Breega, a venture capital firm renowned for supporting European startups like Alice&Bob, Moneybox, and Curve, has raised $52 million toward its new $75 million fund dedicated to African ventures. The firm expects to close the remaining amount by the end of the year, signaling a major step in its global expansion.
Expanding Operations to Africa
To strengthen its foothold on the continent, Breega has opened offices in Lagos, Nigeria, and Cape Town, South Africa. These strategic locations aim to enhance access to local markets and enable deeper collaboration with African entrepreneurs.
Investment Focus: Startup Hubs and Francophone Africa
The fund targets leading African innovation hubs such as Nigeria, Egypt, South Africa, and Kenya. Breega also plans to invest in Francophone countries, including Morocco, Senegal, Ivory Coast, Cameroon, and the Democratic Republic of Congo.
Seed-stage investments will range between $100,000 and $2 million, with 30-40% of the fund reserved for follow-on financing rounds to support scaling companies.
Backing from Prominent Investors
The fund has drawn support from high-net-worth individuals, tech entrepreneurs, and institutions like French public bank Bpifrance and Dutch development bank FMO.
Addressing Africa’s Core Needs
Breega is prioritizing investments in sectors critical to Africa’s development, including agritech, edtech, healthtech, and solutions for infrastructure challenges such as fintech, logistics, mobility, energy, and climate.
Over the last two years, Breega has funded nine African startups, including Kenyan fintechs Sava and Kwara, as well as Ugandan digital loan provider Numida.
Population Growth Drives Opportunity
Citing UNICEF data, Breega cofounder Ben Marrel underscores Africa’s projected population growth from 1.5 billion to 2.5 billion by 2050 as a significant driver for innovation.
“This growth demands technology to address essential needs like food, housing, education, and healthcare,” Marrel explains.
Despite challenges, Marrel sees immense potential. “While building markets from the ground up is tough, the reward is transformative—establishing a dominant solution with minimal competition.”
Challenges in Building Markets
Marrel acknowledges the unique hurdles startups face in Africa compared to Europe or the U.S., where they typically compete with established players.
“In Africa, startups often need to create the market from scratch,” he says. For example, fintechs must address the widespread reliance on cash payments while introducing digital alternatives.
“It’s harder initially, but the impact is profound. Once you establish yourself, the possibilities are limitless,” Marrel adds.
Africa’s Evolving Tech Landscape
Africa’s tech sector has grown rapidly, with startups raising $3.3 billion in 2022 compared to $195 million in 2017. However, funding dropped to $2.4 billion in 2023 due to global economic pressures, marking the first decline since 2017.
While Africa’s funding ecosystem has reached a critical threshold, Marrel notes that it remains underfunded compared to other regions. Local venture capitalists manage relatively small funds, and European and U.S. investments in the continent are still limited.
A Unique Strategy for Africa
Breega is one of the few European venture firms with a dedicated African strategy and a local presence. It has two partners on the ground—Melvyn Lubega in Cape Town and Tosin Faniro-Dada in Lagos—leading its operations and driving its mission to invest in transformative African startups.
By combining local expertise with global experience, Breega aims to unlock Africa’s vast entrepreneurial potential while addressing its most pressing needs.
Source: TechinAfrica