Seedstars Africa Ventures has secured a substantial $30 million investment from EIB Global, a division of the European Investment Bank, marking the first significant institutional funding for its inaugural pan-African venture capital fund.
This new investment comes on the heels of an $8 million infusion from the fund’s primary backer, French private equity firm LBO France. The fund aims to finalize between $80 million and $100 million, focusing on supporting seed and Series A startups, with the potential for follow-on funding up to Series B. This approach is designed to fill a significant funding void and extend support to startups post-acceleration.
The fund’s establishment involved collaboration between Seedstars Group, a notable accelerator in emerging markets, and VC partners Maxime Bouan, Tamim El Zein, and Bruce Nsereko-Lule. This partnership leverages Seedstars Group’s extensive infrastructure and access to African markets.
Seedstars Africa Ventures’ larger-than-average fund size for the African market is intended to provide capital that aligns closely with the needs of entrepreneurs across the continent. It aims to address funding shortages in regions outside the ‘big four’ of Egypt, Kenya, Nigeria, and South Africa, while also offering critical operational and business support to founding teams.
Bouan highlighted the scarcity of capital available beyond the acceleration phase when the team initiated the venture in 2020, pointing to a pressing need for more substantial funding at this stage. Their vision was to create a pan-African fund from the beginning, capable of providing hands-on support to portfolio companies through a focused early-stage investment strategy.
The partnership with Seedstars presented a mutually beneficial opportunity to establish a fund complementing post-acceleration financing. This collaboration leverages Seedstars’ existing resources and market presence, aiming to bolster the continuum of capital. It is designed to offer various funding types tailored to the maturity of the entrepreneurs, thereby attracting both international and local follow-on investor capital.