Seedstars Africa Ventures secures $30 million support from EIB Global to invest in early-stage startups

by MMC
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Seedstars Africa Ventures received a $30 million capital commitment from EIB Global, arm of the European Investment Bank, which becomes the first major institutional investment of its first pan-African venture capital fund.

This 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, filling a significant capital gap and supporting startups at- beyond acceleration programs.

To launch the fund, the venture capital firm’s partners Maxime Bouan, Tamim El Zeïn And Bruce Nsereko-Lule has partnered with Seedstars Group, an emerging markets accelerator, leveraging its infrastructure and market access in Africa.

The company said the fund, larger than average (for Africa), will provide “capital well-tailored to the needs of entrepreneurs” on the continent, filling funding gaps in regions beyond the Big Four (Egypt , Kenya, Nigeria and South Africa) and provide operational and business support to the founders.

“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 from the outset to be pan-African and to be able to provide practical support to portfolio companies through a focused early-stage investment strategy,” said Bouan.

“We approached Seedstars with a win-win opportunity to create a complementary post-accelerator fund that would leverage some of the resources and market access they had already built. This would help strengthen the capital continuum by offering different types of financing tailored to the maturity of entrepreneurs and catalyzing capital from international and local follower investors.

The Paris and Nairobi-based venture capital firm will make an initial investment of between $250,000 and $2 million, with follow-on funding of up to $5 million, in up to 30 startups. This is in addition to entrepreneurs’ access to Seedstars’ tools, networks and visibility. The venture capital firm says the combination of capital and strong support for early-stage startups is necessary but remains 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 public services, or that improve goods, services and efficiency.

Additionally, they are very keen on tech startups, but do not hesitate to invest in innovative brick-and-mortar businesses that gain an unfair advantage through digitalization.

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 venture capital firms due to lower competition, massive market and offers high quality and better price, in comparison. towards more mature English-speaking regions.

Commenting on this investment, supported by the EU ACP Trust Fund and the Boost Africa programme, Edward Claessen, Head of the EIB Regional Hub for East Africa, highlighted the importance of supporting funds in Africa , saying they play an important role in growing and strengthening the continent’s startup ecosystem. . Furthermore, he noted that funds like Seedstars Africa Ventures are invested on the continent and support founders who create jobs and help grow economies.

Thanks to the first financing from LBO France, the venture capital firm has already invested in four companies, including Poa Internet, Kenya’s Internet Service Provider; Nigeria’s network management SaaS for power distribution utilities, Beacon; Shamba Pride agritech food services; and the payment company Bizao. It is now ready to accelerate its investments following the new financing.

Apart from the pan-African fund, the Seedstars group has also invested in 26 companies in Africa through its Seedstars International Ventures Funds I and II.

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