Seedstars Africa Ventures has received a $30 million capital commitment from EIB Global, an arm of the European Investment Bank, which becomes the first major institutional investment for its 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 seed and Series A startups and provide follow-on funding up to Series B, bridging an extensive capital gap and supporting startups beyond acceleration programs.
To launch the fund, the company’s VC partners Maxim Bouin, Tamim El Zain and Bruce Nsereko Lull partnered with Seedstars Group, an emerging markets accelerator, leveraging its infrastructure and market access in Africa.
The firm said the larger-than-average fund (for Africa) would provide “capital suited to the needs of entrepreneurs” on the continent, bridging funding gaps in regions beyond the big four (Egypt, Kenya, Nigeria and South Africa). and provides operational and business support to founders.
“When the team started 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 start and be able to provide hands-on support to portfolio companies through a targeted early-stage investment strategy,” said Bouan.
“We approached Seedstars with a win-win opportunity to raise a complementary post-acceleration fund that would leverage some of the resources and market access they had already built. This would help strengthen the continuity of capital by offering different types of financing that suit the maturity of entrepreneurs and catalyzing international and local investment capital of followers.”
The Paris and Nairobi-based VC firm will make an initial investment of $250,000 to $2 million, and follow-on funding of up to $5 million, in up to 30 startups. This is in addition to giving entrepreneurs access to Seedstars tools, networks and exposure. The VC firm says the combination of capital and strong backing for early-stage startups is essential but still relatively rare on the continent.
Seedstars Africa Ventures said that while the fund is sector agnostic, it is interested in startups that address basic needs such as education, healthcare and utilities or enhancing goods, services and efficiency.
In addition, they are big on technology start-ups, but are not “averse to investing in innovative businesses that gain an unfair advantage from digitalisation”.
The company also plans to invest up to 50% of the fund in French-speaking Africa, a region that continues to be an investment destination for emerging VCs due to lower competition, huge market opportunities and high-quality, better-priced offerings. compared to more mature English-speaking regions.
Commenting on the investment, which is supported by the EU’s ACP Trust Fund and Boost Africa programme, EIB Regional Hub Head for East Africa Edward Claessen highlighted the importance of supporting funds in Africa, saying they play an important role in development and strengthening the continent’s startup ecosystem. In addition, he noted that funds such as Seedstars Africa Ventures are investing in the continent and supporting founders who create jobs and contribute to the development of economies.
Through seed funding from LBO France, the VC firm has already invested in four businesses, including Kenyan internet service provider Poa Internet. Nigeria’s network management SaaS for electricity distribution utilities, Beacon; Power Services agritech Shamba Pride and payments company Bizao. It is now set to accelerate investment following the new funding.
In addition to the pan-African fund, Seedstars Group has also invested in 26 companies in Africa through Seedstars International Ventures Funds I and II.
