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 a $8 million investment from the fund’s anchor investor French private equity firm LBO France. The fund targets to close at between $80 million and $100 million to back seed and series A startups, and offer follow-on funding up to Series B, bridging an extensive capital gap, and supporting startups beyond accelerator programs.
The VC firm’s partners Maxime Bouan, Tamim El Zein and Bruce Nsereko Lule (who joined the duo two years ago) partnered with Seedstars Group, an emerging markets accelerator, to tap its infrastructure and market access in Africa.
Seedstars Africa Ventures will make 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 granting the entrepreneurs access to Seedstars tools, networks, and visibility. The fund says the combination of capital and strong support for early-stage stage startups is still relatively rare on the continent.
Seedstars Africa Ventures said that while the fund is sector-agnostic, it is keen on startups that address basic needs such as education, healthcare and utilities, or enhancing goods, services and efficiency.
Additionally, they are big on tech startups but do not “shy away from investing in innovative brick-and-mortar businesses that get an unfair advantage from digitalization.”
The fund also plans to invest up to 50% 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.
Through initial funding from LBO France, the Seedstars Africa Ventures fund has already invested in four businesses including Kenya’s internet service provider Poa Internet; Nigeria’s grid management SaaS for electricity distribution utilities, Beacon; Power Services agritech Shamba Pride, and payments company Bizao. It is now set to accelerate investments following the new funding.