In a groundbreaking move, Seedstars Africa Ventures has garnered a $30 million commitment from EIB Global, marking the European Investment Bank’s maiden major institutional investment in the Pan-African venture capital fund.
Expanding Financial Support:
This substantial commitment follows an $8 million investment from French private equity firm LBO France, the anchor investor for the fund. Seedstars Africa Ventures aims to reach a funding range of $80 million to $100 million, focusing on supporting seed and Series A startups, with the capability to provide follow-on funding up to Series B. This initiative aims to bridge significant capital gaps, offering sustained support beyond accelerator programs.
Strategic Collaboration with Seedstars Group:
To launch this venture capital fund, partners Maxime Bouan, Tamim El Zein, and Bruce Nsereko Lule from the VC firm collaborated with Seedstars Group, a prominent emerging markets accelerator. Leveraging Seedstars Group’s infrastructure and market access in Africa, the fund seeks to fill the financing void and extend operational and business support to founders.
Pan-African Focus and Unique Approach:
Seedstars Africa Ventures intends to stand out with its larger-than-average fund tailored to the needs of entrepreneurs in the continent. The fund aims to address funding gaps in regions beyond the prominent four (Egypt, Kenya, Nigeria, and South Africa). Moreover, it pledges operational and business support to portfolio companies, emphasizing a hands-on approach.
Investment Strategy and Sector Focus:
The VC firm plans to make initial investments ranging from $250,000 to $2 million and follow-on funding of up to $5 million in up to 30 startups. While being sector-agnostic, Seedstars Africa Ventures expresses keen interest in startups addressing fundamental needs such as education, healthcare, and utilities, as well as those enhancing goods, services, and efficiency.
Emphasis on Tech Startups and Francophone Africa:
Although favoring tech startups, Seedstars Africa Ventures is open to investing in innovative brick-and-mortar businesses leveraging digitalization. The firm also plans to allocate up to 50% of the fund to Francophone Africa, recognizing the region’s potential due to lower competition, significant market opportunities, and attractive deal terms.
EIB’s Support and Impact on African Startup Ecosystem:
Edward Claessen, EIB’s head of the regional hub for East Africa, emphasized the significance of supporting funds like Seedstars Africa Ventures in growing and strengthening Africa’s startup ecosystem. He highlighted their role in backing founders who create jobs and contribute to economic growth.
Accelerated Investments and Previous Successes:
With initial funding from LBO France, Seedstars Africa Ventures has already invested in four businesses, including Kenya’s Poa Internet, Nigeria’s Beacon, Shamba Pride in agritech, and Bizao in payments. The new funding injection is set to accelerate their investment activities.
Beyond Pan-African Fund: Seedstars Group’s Broader Impact:
Beyond the Pan-African fund, the Seedstars Group has made significant investments in 26 companies in Africa through its Seedstars International Ventures Funds I and II, further contributing to the growth and development of the continent’s startup ecosystem.
Source: Tech Crunch