A New USD 168 Mn African Tech Ventures Fund Is In The Making 

Tunisia-based Africinvest has joined forces with Cathay Capital, a Paris-based global private equity firm, to launch a new Africa tech fund, which will involve the raise of USD 168 Mn, according to a Medium post.

In as much as Africa has played fairly in the aspect of fund attracting and reception, there is still room for improvement, as the standards established by other tech regions of the world reach billions of dollars. While the details regarding this new VC fund are still in the pipeline, it is believed that what is christened to be the Cathay Africinvest Innovation Fund will fundamentally focus on Series A to C stage investments in African tech companies.

February 2016, Africinvest – which is a pan-African private equity firm – teamed up with another PE firm Siparex to reach a first close of the Fonds de Co-Localisation Franco-Tunisien (FCFT) with USD 22.4 Mn in capital commitments. The fund was promoted and subscribed by France-based investment bank Bpifrance and the North African arm of the French development agency Caisse des Depots et Consignations. The FCFT, under the co-management of both PE firms, was launched to finance Small and Medium-sized Enterprises in both France and Tunisia.

In May 2018, Africinvest was reported to have had its hand full as it doubled down on raising funds, pursuing approximately USD 135 Mn to invest in innovative new ventures operating in the continent. The firm’s first capital raise, it was reported that the fund would be closed at the end of 2018.

During the pre-fund announcements of the previous USD 135 Mn, AfricInvest VC Director Selam Ribica was quoted to have said the raise is aimed to be the first truly African fund with offices in North, East and West Africa, an idea which she said will help African startups grow into regional giants. The fund, according to the PE firm, would be accessible to successful startups from any sector, from any country in the continent, made possible by Africinvest’s different offices in Tunis, Lagos, Abidjan, Nairobi, Casablanca, Algiers, and Cairo.

Meanwhile, another source of this news says that Denis Barrier Africinvest’s co-founder, who revealed that the investment could come as early as summer 2019, said he hopes to strong local showing for startups across the fund’s 10 country offices, having added Port Louis, Dubai and futuristically, Johannesburg to the aforementioned mix.

Well, it remains unclear whether these two fund-in-the-pipeline narratives have a relationship, but Crunchbase reports that AfricInvest has raised a total of €261M (USD 294,269,931) across 2 funds, their latest being Financial Inclusion Vehicle (FIVE), which was announced on Jan 15, 2019, and raised a total of €67M (USD 75,539,150). So far, the PE firm has made 48 investments, with the most recent being on Nov 26, 2018, when they invested $51M in iSON Xperiences.

Aziz Mebarek, co-founder AfricInvest says: “We are excited about the combination of experience, expertise, and networks that will be delivered through this partnership between AfricInvest and Cathay, a world-class investor. Our combined objective is to provide support to a new generation of African companies in cutting-edge fields, with the ambition to grow them regionally and globally.”

Mingpo Cai, Co-founder, and Chairman of Cathay Innovation adds: “This partnership is based on shared vision and values, as well as ambitious objectives in terms of impact and return on investment. This Fund will also provide Cathay Innovation’s portfolio companies with access to fast-growing African markets. We are convinced that this partnership will contribute to changing the financing and development of innovation in Africa.”

We also believe that this initiative is launched in the right timing to be successful and can potentially become massive. African economies are among the fastest growing in the world with increasingly positive outlook. Africa is home to 6 of the top 10 fastest growing economies in the world in 2018. Additionally, the growth in the African continent is spread among large numbers of countries, and today some of the non-commodity intensive economies are leading the growth curve like Ghana, Ethiopia, the Ivory Coast, Senegal and Tanzania, the Medium post read.

The fund will focus on the development of tech startups in Africa, supporting them to significantly scale and attain developed standards that would enable them to break into international markets and compete with other global startups. The selected companies would be afforded value-added support via the mobilization of the Fund team’s multidisciplinary professionalism and networks within the various ecosystems, with targets on fostering partnerships and accelerating geographical expansion.

Save the creation of high-tech jobs and prices being more accessible to millions of Africans; the fund will substantially impact a tech sector that is already expected to grow in terms of skill development and technical know-how while creating value and economic, financial and social inclusion with reasonable ROIs.