KENYA – EIB Global, a specialized arm of the European Investment Bank (EIB), the European Union’s long-term lending institution, has made a US$30 million equity investment in Seedstars Africa Ventures I, a venture capital fund aimed at providing risk capital to innovative businesses and startups across Africa.
The US$30 million investment is backed by the EU, through US$20 million from the ACP Trust Fund and US$10 million from the Boost Africa programme. With this investment, the EIB has now fully deployed Boost Africa, a programme launched in 2016 to boost sustainable jobs and prosperity through venture capital for African entrepreneurs.
Seedstars Africa Ventures I, which is based in Nairobi and Paris, said “The anchoring ticket provided by the European Investment Bank is a testament to our investment thesis and the work we do across Africa.
“It signals the relevance of our positioning as well as the effectiveness of our support to portfolio companies. This recognition will further help us onboard both African and foreign investors in the fund to reach our US$80 million to US$100 million target size,” it said.
In 2020, Maxime Bouan, Tamim El Zein, and Bruce Nsereko Lule launched Seedstars Africa Ventures I fund in collaboration with LBO France and Seedstars, a global firm that invests in and supports entrepreneurs from emerging markets.
The fund, which has invested over US$7 million in 25 companies in sub-Saharan Africa, plans to invest US$250,000 to US$2 million in up to 30 startups, with the possibility of additional funding up to US$5 million. In addition, the entrepreneurs get access to Seedstars’ networks, resources, and visibility.
The firm stated that the larger-than-average fund (for Africa) would bridge funding gaps in regions other than the big four — Egypt, Kenya, Nigeria, and South Africa — offer operational and business support to founders and provide “capital well suited to the needs of entrepreneurs” on the continent.
The Fund is targeting US$80 to US$100m and will invest in Seed+ and Series A rounds, with an ability to follow on significantly, effectively bridging the pools of capital available.
“Encouraging and promoting innovation and digitalization is crucial to developing strong and sustainable economies,” said EIB Vice-President Ambroise Fayolle.
“African entrepreneurs hold the key to the continent’s future, creating jobs, reducing inequality and improving quality of life. The EIB, as part of Team Europe, is committed to supporting African businesses, and we are proud of the success of Boost Africa and the ACP Trust Fund.”
The fund will invest in companies developing and implementing digital technologies, in particular those addressing basic needs such as education, healthcare and utilities, or enhancing goods, services and efficiency.
The Fund expects to reach a first close early this year, but has already completed four transactions: Beacon Power Services, Poa! Internet, Shamba Pride and Bizao.
Seedstars Africa Ventures stated that, while the fund is not industry-specific, it is interested in companies that improve products, services, and efficiency and businesses that provide necessities such as utilities, healthcare, and education.
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