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Seedstars Africa Ventures I raises $42 million in first close to create 10,000 jobs in African startups

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Seedstars Africa Ventures I, a venture capital fund dedicated to early-stage African startups, has achieved a remarkable milestone with a $42 million first close, announced at the 2024 Africa Investment Forum. This significant funding underscores a robust commitment to fostering innovation and job creation across the continent.

Key investors in this initiative include the African Development Bank (AfDB), EIB Global backed by the European Union, and Boost Africa, among others. The fund’s primary focus areas encompass climate tech, financial inclusion, and digital innovation.

With $50 million already committed towards its $80 million target, Seedstars Africa Ventures I aims to create over 10,000 formal jobs while addressing financing gaps in Africa’s underserved startup ecosystem. The fund offers early-stage financing of up to $2 million in seed and Series A rounds, with follow-on investments reaching up to $5 million. By facilitating multiple funding rounds, the fund not only unlocks co-investment opportunities but also provides crucial operational support to startups.

Earlier this year, Seedstars Africa Ventures attracted $10.5 million from the African Development Bank to support high-growth startups, aiming to create nearly 9,000 jobs, with 50% reserved for women. The fund has already made significant strides, deploying $10 million into five pioneering startups in sectors ranging from cleantech to financial inclusion, collectively serving over 60 million people across eight African countries.

Notable portfolio companies include:

  • Beacon Power Services (Nigeria): Enhancing electricity access for millions.
  • Poa! Internet (Kenya): Providing affordable broadband to over 60,000 households.
  • Xeno (Uganda): Offering sustainable financial products for savings.
  • Bizao (Côte d’Ivoire, Senegal, France): Delivering advanced payment aggregation solutions.
  • Shamba Pride (Kenya): Empowering nearly 300 franchised shops to support farmers with tools and training.

The fund is led by founders Maxime Bouan, Tamim El Zein, and Bruce Nsereko Lule, who bring a combined 45 years of investment experience to the initiative. Furthermore, Seedstars Africa Ventures I emphasizes gender equity, aligning its portfolio with the 2X Challenge criteria to empower women entrepreneurs.

Investors like the AfDB and EIB have recognized the fund’s vital role in advancing digital transformation and financial inclusion. “Seedstars Africa Ventures presents a strategic opportunity to enhance access to risk capital, particularly in Francophone Africa, while improving finance availability for youth and women,” stated Ahmed Attout, AfDB’s Director for Financial Sector Development.

As Seedstars Africa Ventures I marks its $42 million achievement, it highlights Africa’s increasing significance in global investment circles. By addressing critical funding gaps, the fund is not only nurturing high-growth startups but also driving socio-economic transformation across the continent. This evolving landscape underscores the importance of consulting firms like Knowdys, which monitor the sector and provide essential insights for organizations seeking to capitalize on these opportunities.

The Editor