Partech closes its second Africa fund at over $300 million to invest from seed to Series C

by MMC
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Image credits: Partech Africa

Partech closed its second Africa fund, Partech Africa II, at €280 million (over $300 million), just one year after achieving its first close.

At this size, Partech Africawhich initially targeted 230 million euros before the start of its fundraising, consolidates its position as the largest fund dedicated to African startups.

Against a backdrop of withdrawal of institutional investors and global venture capital firms from Africa, the recent closure of the Partech Africa fund is significant. The continent has seen a notable decline in investor activity, with a 50% drop in 2023 compared to the previous year, as highlighted by a Partech study. report. This withdrawal, influenced by global economic changes and local challenges, has resulted in a reduction in venture capital flows for African startups, totaling between $2.9 billion and $4.1 billion last yeardown from $4.6 billion to $6.5 billion in 2022.

The impact was felt across all investment stages, with seed-stage deals down 33% and growth-stage deals down 39%, according to Partech’s findings. While Partech Africa, known for leading seed rounds, cannot single-handedly reverse this trend, the focus on Series C seed rounds can provide some stability and support to startups navigating these times. difficult.

Partech Africa aims to support founders at different stages of their journey, from start to finish, leveraging its position in the ecosystem, the firm’s general partners communicated. “The ability to anchor production cycles at all stages, from seed to start of growth, is more critical than ever. » Cyrille Collon said in a statement.

Meanwhile, in an email to TechCrunch, Tidjane Démé says the VC firm’s expanding team will allow it to effectively deploy capital and offer support to portfolio companies through these stages. With offices in Dakar, Nairobi and Dubai, Partech Africa recently established a presence in Lagos, where it is actively recruiting to engage closely with startups in the region, highlighting the importance of the city as a third of the companies in the The company’s portfolio is based there. However, he clarified that the company will deploy the majority of its second fund between the Series A and B rounds.

Among its second fund’s investments is Revio, a South African payments orchestration platform, whose seed round Partech Africa co-led with global fintech fund QED. Additionally, the company has made undisclosed investments in an Egyptian proptech company and a Senegalese e-commerce startup. Partech Africa plans to support more than 20 companies, with initial investments ranging from $1 million to $15 million, he revealed.

The venture capital company based in Dakar, which supported 17 startups in its first fund, prioritizes sectors such as fintech, agtech, healthtech, retail, FMCG and agency banking, which are crucial for employment and activity economic of Africa. Notable investments include Wave, TradeDepot, Yoco and Reliance.

“Companies in the first fund can benefit from follow-on capital from the first fund but not from the second,” Deme commented on the company’s deployment strategy. “We continue to support Fund 1 companies throughout their capital journey and in many other ways. »

More of the fund’s strategy was covered during its first closure last February.

Partech Africa’s investor base reflects a diversity of profiles. When it first closed, development finance institutions, commercial investors, African funds of funds and family offices were among its limited partners. For its second close, it attracted participation from US and Middle Eastern pension funds, sovereign wealth funds, the Dubai Future District Fund (DFDF) and the African Reinsurance Corporation (Africa Re).

“We are grateful for the support and commitment of our investors: almost all Fund I investors have reinvested, and some have more than doubled their commitment,” noted Collon. “We are also honored to benefit from the support of a new set of strategic investors from the United States, the Middle East and Africa, and for some of them, this is their first engagement in the African technology. »

The Partech African fund is part of several notable funds that have emerged on the continent over the past year, despite the difficulties fund managers face in raising capital as limited partners scrutinize strategy and track record. Other large funds include Norrsken22, Al MadaAnd Novastar’s People and Planet Africa. Additionally, companies like Enza Capital, Ecuador, Knife capitalAnd E3 Low Carbon Economy Fund for Africa (E3LCEF) also closed significant funds, reflecting continued investor interest in Africa’s growth potential.



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