Paris- and Nairobi-based VC firm, Seedstars Africa Ventures has closed a $30 million capital commitment from EIB Global, an arm of the European Investment Bank (backed IQM and Exeger). This is the first major institutional investment for its first pan-African venture capital fund.
Investment plans
This commitment follows a $8 million investment from the fund’s anchor investor French private equity firm LBO France. The fund targets somewhere between $80 million and $100 million. It will use the investment to back seed and series A startups, extending to up to Series B in follow-on investments.
Seedstars Africa Ventures will make an initial investment of $250K to $2 million, and follow-on funding of up to $5 million in up to 30 startups. The supported entrepreneurs will access Seedstars tools, networks, and visibility.
As per the VC firm, the fund will provide capital well-suited to the needs of entrepreneurs in Africa, and bridge funding gaps in regions beyond Egypt, Kenya, Nigeria, and South Africa. Also, it will provide operational and business support to founders. In addition, it will back startups addressing basic needs such as education, healthcare, and utilities, or enhancing goods, services, and efficiency.
It also plans to invest up to 50% of the fund in Francophone Africa, a region that continues to be an investment destination for emerging VCs owing to lower competition, a massive market opportunity, and high-quality and better-priced deals, in comparison to the more mature Anglophone regions.
Notable African investments
The Seedstars Africa Ventures fund was launched by partners Maxime Bouan, Tamim El Zein and Bruce Nsereko Lule alongside the Seedstars Group, an emerging markets accelerator.
Through initial funding from LBO France, the VC firm has already invested in four businesses including Poa Internet, Kenya’s internet service provider; Beacon, Nigeria’s grid management SaaS for electricity distribution utilities; Shamba Pride, Power Services agritech; and Bizao, a payments company. It is now set to accelerate investments following the new funding.
Besides this, the Seedstars Group has also invested in 26 companies in Africa through its Seedstars International Ventures Funds I and II.
“When the team launched in 2020, there was very little capital available beyond acceleration, so there was a clear need to provide more capital at this stage. The team wanted to be pan-African from the onset and be able to provide hands-on support to portfolio companies through a targeted early-stage investment strategy,” said Maxime Bouan, Founding Partner at Seedstars Africa Ventures.
“We approached Seedstars with a win-win opportunity to build a complementary post-acceleration fund that would leverage some of the resources and market access that they had already built. This would contribute to strengthening the continuum of capital by offering different types of funding suited to the entrepreneurs’ maturity, and catalysing international and local follower investor capital,” he added.
