Venture capital firm Novastar Ventures has successfully closed its third fund, securing $147 million for its Africa People and Planet Fund III. This new capital pool, a 40% increase from its predecessor, will be deployed across the continent to support impact-driven startups. The fund underscores a growing investor appetite for ventures that address critical climate and social challenges throughout Africa.
Expanding Geographic and Strategic Horizons
With this fund, Novastar is broadening its geographic focus from East and West Africa to a pan-continental investment strategy. The firm will target companies from the pre-Series A to Series B stages, where they have established early product-market fit. Initial investments will range from $1 million to $8 million, providing crucial growth capital to promising enterprises across the continent.
A Strong Coalition of Global Investors
The fund attracted a diverse group of limited partners, including both new and returning institutional backers. Development finance institutions such as British International Investment, Norfund, and Proparco reaffirmed their confidence in Novastar’s model. A significant new development is the strong participation from prominent Japanese institutions, signaling a new source of capital for African startups.
Forging the Japan-Africa Investment Bridge
Novastar is actively building what it calls a "Japan-Africa bridge" to channel investment into the continent's growing ecosystem. Partner Brian Odhiambo noted that Japanese firms like JICA, SBI Holdings, and SMBC are seeking strategic and commercial growth opportunities. This structured partnership will provide Japanese limited partners with co-investment rights, deepening financial ties between the regions.
Early Deployments Signal a Clear Mandate
Capital from the new fund has already been deployed into six innovative companies across various sectors, demonstrating its sector-agnostic approach. Investments include food delivery platforms Chowdeck and Breadfast, e-mobility startups ARC Ride and Greenwheels, and agritech firm Sistema.bio. These early bets reflect the fund's mandate to back businesses with clear environmental or social objectives.
Commitment to Sustainable Development
Co-founder Andrew Carruthers stated that the fund is a natural progression of Novastar’s decade-long strategy of backing transformative businesses. The firm remains committed to generating lasting financial, social, and environmental value for the common good. This approach aims to address Africa’s most significant challenges while promoting a sustainable development pathway for the continent and the world.
The final close of Novastar's $147 million fund marks a significant milestone for Africa's venture capital landscape. Its expanded pan-African reach, strategic inclusion of Japanese investors, and unwavering focus on impact-driven enterprises position it to catalyze sustainable growth. This development reinforces the increasing global recognition of Africa as a hub for innovative, venture-backable solutions to global challenges.