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The Board of Directors of the African Development Bank (AfDB) unanimously approved the Bank’s decision to acquire a stake of $10.50 million in the capital of Seedstars Africa Ventures S.L.P. venture capital fund. This strategic investment aims to facilitate the funding of innovative African businesses demonstrating robust growth potential.
The approved investment structure involves USD 7 million from the Bank’s ordinary resources and $3.5 million from the European Union Boost Africa program. This financial injection is expected to empower Seedstars Africa Ventures (SAV) in raising additional funds, expanding its footprint across Africa, and attracting further investment from other sources.
Seedstars Africa Ventures operates as an early-stage venture capital fund, focusing its investments on high-growth companies operating throughout Sub-Saharan Africa. The fund prioritizes businesses that exhibit significant potential, generate income, and address key market challenges, with a specific emphasis on underserved markets, including French-speaking countries such as Senegal, Côte d’Ivoire, Benin, and Cameroon, as well as other nations like Ghana, Uganda, and Tanzania.
With a total fund size of USD 75 million, Seedstars Africa Ventures concentrates on supporting businesses during their startup and launch phases, especially those addressing critical market constraints. Initial investments typically hover around the EUR 250,000 mark, with subsequent capital injections of €5 million to foster sustained growth.
SAV’s thematic focus encompasses financial inclusion, technologies empowering businesses (fintech and insurtech), retail sales and logistics platforms targeting online and mobile consumer markets, health-related technologies, pre-paid off-grid energy, and the broader adoption of technology in businesses, particularly within the food-processing industry and value chains.
The anticipated impact of the fund includes the creation of approximately 9,000 full-time jobs, with half of them dedicated to women, thereby making a substantial economic contribution.
The objectives of the fund align with those of Boost Africa, seeking to invest in innovative startups that exhibit robust growth and positive social impact. This investment strategy further reinforces the African Development Bank’s commitment to connecting entrepreneurship, investment, and economic growth with poverty reduction and sustainable development. Moreover, it contributes to the Bank’s operational priorities, known as the High 5, by supporting startups operating in crucial sectors such as agriculture, health, industrialization, and off-grid energy. Ultimately, these investments play a role in enhancing regional integration and improving the lives of people across Africa.
Source: Africa Development Bank