Proparco has committed $5 million to Novastar Ventures’ Africa People and Planet Fund III, strengthening support for climate-focused and inclusive businesses across the continent. The announcement follows Novastar’s final close of the fund at $147 million, positioning it among the largest venture capital vehicles focused on Africa. The investment is designed to help scale companies that combine commercial growth with measurable environmental and social impact.
Strategic Investment in Africa’s Green Transition
The commitment is being made through Proparco’s Choose Africa Venture Capital programme, which supports early-stage companies by increasing access to growth financing. Backed by the European Union and the European Fund for Sustainable Development Plus, the programme seeks to encourage entrepreneurship, innovation and job creation across African markets. It also contributes to wider European initiatives, including the EU Global Gateway strategy and the Team Europe Initiative Investing in Young Businesses in Africa.
Novastar’s Expanding Pan-African Role
Novastar Ventures has built a decade-long track record as one of Africa’s early and prominent venture capital investors. The firm manages more than $350 million in assets and works with entrepreneurs developing businesses capable of reshaping markets and sectors. Its latest fund expands its reach with a pan-African approach, targeting companies that can deliver both financial returns and long-term benefits for people and the planet.
Africa People and Planet Fund III invests from seed to growth stage, with individual commitments ranging from $1 million to $8 million. The fund has already backed six companies operating in sectors such as delivery, electric mobility, smartphone access and sustainable agriculture. These areas reflect the fund’s focus on technology-enabled business models that address everyday needs while supporting a lower-carbon and more resilient economy.
Supporting Essential Services and Climate Impact
The fund targets businesses that improve access to essential goods and services for consumers, workers and producers across African markets. Its investment strategy also places strong emphasis on environmental outcomes, including reducing or avoiding greenhouse gas emissions, improving soil health and strengthening biodiversity. This combination reflects growing investor interest in companies that can address structural development gaps while contributing to climate resilience.
Proparco said venture capital can play a central role in advancing Africa’s green transition by helping entrepreneurs scale practical solutions to urgent challenges. Oliver Game, Lead PE and VC at Proparco’s East Africa regional office, said the commitment reflects confidence in Novastar’s ability to identify and support technology-enabled companies. He added that the partnership aims to help founders build a more inclusive and climate-resilient future for millions of people across the continent.
Development Finance and Market Opportunity
The announcement highlights the growing role of development finance institutions in mobilising capital for early-stage African companies. By investing in funds such as Novastar’s, institutions like Proparco can support local entrepreneurship while sharing risk with private and international investors. This approach is particularly relevant in markets where innovative companies often face limited access to patient capital despite strong demand for solutions in mobility, agriculture, digital access and climate adaptation.
For Novastar, the final close of Africa People and Planet Fund III provides additional capacity to back founders building businesses around both market demand and impact. For Proparco, the $5 million commitment reinforces a broader strategy of supporting private sector development in Africa through investment, innovation and climate-aligned growth. The partnership also signals continued confidence in venture capital as a tool for financing companies that can generate jobs, widen access to services and accelerate sustainable development.
Proparco’s investment in Novastar Ventures’ third fund is a targeted contribution to Africa’s emerging green and inclusive growth economy. By backing a $147 million pan-African venture fund, the institution is helping channel capital toward startups and growth-stage companies addressing climate, access and productivity challenges. The deal underlines the increasing importance of venture capital in supporting Africa’s transition toward more resilient, inclusive and environmentally sustainable markets.