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Novastar Ventures becomes $200M African VC fund after $108M raise

Novastar Ventures becomes $200M African VC fund after $108M raise

African startups have one other $100 million in VC to pitch for after Novastar Ventures’ newest elevate.

The Nairobi and Lagos primarily based funding group introduced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s whole capital to $200 million.

With the extra assets, the agency plans to make 12 to 14 investments throughout the continent, in keeping with Managing Director Steve Beck. He spoke to TechCrunch on Novastar Ventures’ plans for the brand new fund.

A notable replace to Novastar’s VC focus is geographic scope. The agency was initially co-founded in Kenya by Beck and British investor Andrew Carruthers and constructed its first portfolio largely round corporations primarily based in East Africa. Novastar Ventures made 15 investments with its first fund, together with corporations comparable to Uganda and Kenya centered vitality startup SolarNow and agtech enterprise M-Farm.

“The second fund is mainly the identical technique as the primary, however…the most important distinction is that we opened up a second entrance in West Africa — extra significantly to be in and across the entrepreneurial system in Lagos,” Beck informed TechCrunch on a name.

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Before closing its Africa Fund II, Novastar Ventures had already made a number of investments in West Africa, together with main a spherical in Nigerian on demand motorbike transit startup Max.ng and backing Ghanaian well being firm, MPharma. Novastar opened an workplace Lagos in 2019.

MAX.ng raises $7M spherical backed by Yamaha and pilots EVs in Nigeria

On the forms of startups Novastar will goal with its new fund, the main focus is extra on mission than trade silos, in keeping with co-founder Steve Beck. “We’re sector agnostic. I might describe us extra as a section fund than a sector fund,” he stated.

“We actually attempt to search for companies known as breakthrough companies, [those] which might be addressing the most important issues within the largest markets.”

That has led Novastar Ventures to spend money on digital corporations in schooling, info entry, agtech, mobility and off-grid vitality.

“Essentially what we’re doing is searching for these companies which might be addressing the essential wants, primary items and providers throughout the true mass markets of the continent,” stated Beck.

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On whether or not the agency is a devoted affect fund, Beck stated, “The means we characterize ourselves is we’re a industrial enterprise fund with an affect display.”

On funding quantities and kinds, Novastar Ventures is pretty versatile on ticket measurement, from seed to later stage.

“We’re gonna…have some portfolio corporations the place we put to work 1,000,000 {dollars} or much less or have been going to have some the place we put $eight or $9 million {dollars} in via capital rounds. That’s…the deployment technique,” Beck stated.

Novastar Ventures works carefully with its portfolio corporations, in keeping with its co-founder.

“We’re very lively buyers and all the time take a board seat to be near the entrepreneurs. We usually are the primary institutional investor that they’ve.”

Image Credits: TechCrunch

Startups who need to pitch to the corporate can attain out to the fund’s founders and administrators through the web site or LinkedIn, in keeping with Beck. He added that Novastar Ventures is recruiting so as to add one other member to its investor workforce in 2020.

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The agency’s newest elevate and $200 million capital quantity creates one other excessive worth fund centered on African startups.

On the excessive finish of estimates, the continent’s tech ecosystem reached $2 billion in VC to startups in 2019, in comparison with lower than half a billion greenback 5 years in the past.

Other giant Africa centered VC retailers embrace TLcom Capital — which closed a $71 million fund in February —  and Partech, which doubled its Africa fund to $143 million in 2019. The enterprise arms of main international corporations have additionally grow to be extra lively in African tech lately, together with that of Goldman Sachs and Visa.

Visa’s Africa technique banks on startup partnerships

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