Seedstars Africa Ventures has secured a $30 million capital commitment from the European Investment Bank, an arm of the European Investment Bank, which becomes the first major institutional investment for the first pan-African venture capital fund.
The new commitment follows an $8 million investment from the fund’s lead investor, French private equity firm LBO France. The fund aims to close between $80 million and $100 million to support Series A startups, provide follow-on funding up to Series B, bridge the wide capital gap, and support startups outside of accelerator programs.
Venture capital firm partners Maxime Bouin, Tamim El-Zein, and Bruce Nsereko Lule (who joined the duo two years ago) have teamed up with Seedstars Group, an emerging markets accelerator, to leverage its infrastructure and market access in Africa.
“When the team launched in 2020, there was very little capital available other than for acceleration, so there was a clear need to provide more capital at this stage. “The team wanted to be African from the beginning and be able to “To provide practical support to portfolio companies through a targeted investment strategy at an early stage.”
“We approached Seedstars with a win-win opportunity to build a complementary post-acceleration fund that would leverage some of the resources and access to markets they had already built. This would contribute to enhancing capital continuity by offering different types of financing suitable for mature entrepreneurs.” And stimulate the capital of international and local investors.
Seedstars Africa Ventures will make an initial investment of between $250,000 to $2 million, and subsequent funding of up to $5 million, in up to 30 startups. This is in addition to giving entrepreneurs access to Seedstars tools, networks, and visibility. The fund says the combination of capital and strong support for early-stage startups is essential but still relatively rare on the continent.
Seedstars Africa Ventures said that although the fund is not sector-oriented, it is keen on startups that meet basic needs such as education, healthcare and utilities, or enhance goods, services and efficiency.
Additionally, it’s big into tech startups but doesn’t “shy about investing in innovative companies that get an unfair advantage from digitization.”
The fund also plans to invest up to 50% in French-speaking countries in Africa, a region that remains an investment destination for emerging venture capital firms due to lower competition, huge market opportunities, and higher quality and better-priced deals, compared to French-speaking countries. More mature English-speaking regions.
Through seed funding from LBO France, the Seedstars Africa Ventures fund has already invested in four companies including Kenyan internet service provider Poa Internet; Network Management in Nigeria SaaS for Electricity Distribution Utilities, Beacon; Agricultural energy services Champa Pride, and payments company Bizao. Investments are now set to accelerate following the new funding.
Outside of the African Fund, Seedstars Group has also invested in 26 companies in Africa through Seedstars International Ventures Funds I and II.
More to follow