Impact Investor Seedstars Launches USD 100 Mn Pan-African Venture Fund

Impact investor Seedstars has partnered with First Growth Ventures to launch Seedstars Africa Ventures, a sub-Saharan Africa fund targeting promising and innovative startups.

The venture fund that is expected to make its first investments by the end of this year is targeting USD 100 MN to make early-stage minority investments from USD 250K to USD 5 Mn in emerging startups.

The partnership between Seedstars and First Growth Ventures was announced on April 4th during the sixth annual Seedstars World event took place in Lausanne, Switzerland.
Founded in September 2012 by Adrien de Loes, Michael Weber, Pierre-Alain Masson, Seedstars is a business incubator which invests in early stage firms based in the technology industry.

The incubator notes that while later-stage funding is becoming increasingly available with analysts recording an increase of late-stage transactions of up to 45 percent in 2018, enterprises across the continent struggle to find long term, early-stage capital. Early stage transactions have only grown by 10 percent in 2018, emphasizing a VC gap for young companies.

Charlie Graham-Brown, the Chief Investment Officer at Seedstars says, “Seedstars has been working for 6 years to close the entrepreneurial ecosystem gap in emerging markets through various startup focused initiatives. Since 2017 we’ve been actively investing at a seed stage and although venture capital investment volumes in Africa grew to over a USD 1 Bn in 2018, Europe, a similar sized region, had volumes near USD 20 Bn. This fund will help reduce this VC funding gap and in turn contribute to reducing the GDP gap.”

“We strive to identify the best entrepreneurs irrespective of their sectors and countries, and evaluate their business based on their capacity to grow and dominate their markets. Overconcentration of investors on a few verticals and countries is leaving large untapped opportunities,” says Maxime Bouan, partner at First Growth Ventures.

“The challenge of providing quality early-stage support across the continent is one of the main reasons explaining the lack of early-stage funding at this scale. Partnering with Seedstars who has a demonstrated ability to assist companies where they need it most will help us bridge that gap,” says Tamim El Zein, partner at First Growth Ventures.

Featured Image Courtesy: dailymaverick.co.za