Sumitomo Mitsui Banking Corporation (SMBC) has announced its investment in Novastar Ventures Africa People and Planet Fund III, L.P., signaling a strengthened commitment to sustainable growth in emerging markets. The fund, managed by Novastar Ventures Ltd., is one of Africa’s pioneering venture capital firms and has built a reputation for backing transformative businesses across the continent. This move reflects SMBC’s strategy to merge financial growth with the creation of long-term social value.
Expanding in a Growing Market
Africa is poised to become one of the most influential regions in global economic development, with the United Nations projecting that the continent will represent 25 percent of the world’s population by 2050. Rapid population growth and urbanization are fueling demand for stronger infrastructure in areas such as agriculture, logistics, financial services, and legal systems. Local startups are rising to meet these challenges, often through innovation in fintech, mobility, and green technologies that have the potential to reshape economies and societies.
Strategic Importance of African Startups
By embracing risk and technological innovation, African entrepreneurs are becoming essential drivers of infrastructure development and social progress. Their work not only addresses immediate local needs but also helps design the medium-term social structures that will underpin future economic expansion. As global players, including Japanese and Asian companies, increase collaboration with African startups, the continent’s role as a hub for new business flows continues to grow.
Novastar Ventures’ Role in Transformation
Founded in 2014, Novastar Ventures is one of the largest and most experienced venture capital firms operating in Africa. With offices in the United Kingdom, Kenya, and Nigeria, and more than $200 million in assets under management, the firm focuses on partnering with entrepreneurs building high-impact businesses. Its portfolio spans companies that deliver essential services while also developing solutions to environmental and social challenges, such as reducing greenhouse gas emissions, enhancing soil health, and preserving biodiversity.
SMBC’s Commitment to Social Value Creation
SMBC’s parent company, Sumitomo Mitsui Financial Group (SMFG), has enshrined the principle of “Create social value” in its Mid-Term Management Plan. To deliver on this policy, the group launched the Social Value Creation Investment Fund, a framework designed to support the development of businesses and industries that contribute positively to society. This fund allows SMBC to engage in risk-taking investments that drive co-creation with customers and the advancement of new technologies.
The Social Value Creation Investment Fund Framework
The Social Value Creation Investment Fund builds on the foundations of the former Sustainability Investment Fund but widens its scope to address five priority challenges: environment, diversity and human rights, poverty and inequality, demographic change, and Japan’s economic revitalization. For fiscal year 2025, SMFG increased the maximum allocation to $345 million, up by $69 million from the previous year, reflecting a growing emphasis on impactful investment. Through this framework, SMBC aims to channel capital toward ventures that deliver measurable social benefits while generating sustainable growth.
Collaborative Growth Opportunities
SMBC’s investment in Novastar’s latest fund illustrates its belief in the role of startups as engines of both economic progress and social problem-solving. By investing in and collaborating with African innovators, the bank seeks to foster the growth of businesses that can introduce new products and models aligned with social value creation. Over the medium term, such partnerships are expected to generate opportunities not only in Africa but also in global markets seeking scalable solutions to pressing challenges.
The partnership between SMBC and Novastar Ventures represents more than just financial backing; it is a statement of intent to link investment with long-term societal benefits. By supporting African startups through a proven venture capital platform, SMBC is helping to build resilient infrastructure, advance sustainability, and unlock inclusive growth. As Africa emerges as a cornerstone of the global economy, this collaboration underscores the increasing importance of socially conscious investment in shaping the future of business and development.