EIB (European Investment Bank) Global has announced a substantial US$30 million equity investment in Seedstars Africa Ventures I, a venture capital fund dedicated to nurturing innovative startups across the continent. This investment marks a critical step in enhancing access to risk capital for burgeoning businesses, enabling them to expand, generate skilled employment, and improve products and services for both businesses and consumers.
The fund prioritizes investments in companies that are developing and implementing digital technologies. Specifically, it targets those addressing fundamental needs such as education, healthcare, utilities, and those enhancing goods, services, and efficiency.
EIB Vice-President Ambroise Fayolle emphasized the importance of innovation and digitalization in building robust and sustainable economies. “African entrepreneurs are crucial for the continent’s future, driving job creation, reducing inequality, and enhancing quality of life,” Fayolle stated, underlining EIB’s commitment as part of Team Europe to support African businesses.
Seedstars Africa Ventures I: A Collaborative Effort
Created by Maxime Bouan, Tamim El Zein, and Bruce Nsereko Lule, in partnership with Seedstars and LBO France, Seedstars Africa Ventures I exemplifies a synergistic effort. LBO France’s multi-country, multi-specialist platform has provided significant experience in small and venture companies, as well as expertise in environmental and social governance (ESG).
The Nairobi and Paris-based team expressed their gratitude for the European Investment Bank’s support, recognizing it as a testament to their investment thesis and effectiveness. They aim to attract further African and foreign investors to reach a US$80 to US$100 million target size.
LBO France views Africa as a region of high growth potential. Their commitment to Seedstars Africa Ventures aligns with their strategy to offer diversified alternative assets to investors, focusing on dynamic sectors and disruptive entrepreneurs. They also hold a majority position in CGF Bourse and Joliba Capital, emphasizing their strong ESG ambition.
European Commission Vice-President Margaritis Schinas highlighted the digital sector as a key growth and innovation driver. He pointed out the EU’s investment in Africa’s digital transformation through the Global Gateway, which aligns with the EU’s priority to foster quality growth and jobs in African digital economies.
Tremendous Growth, Yet Equity Gaps Persist
Despite a significant increase in venture capital investments in Africa, reaching US$4.8 billion in 2022, early-stage funding still faces considerable equity gaps. Seedstars Africa Ventures focuses on Seed+ and Series A rounds, bridging these gaps and providing critical operational support.
The Fund has already completed transactions with innovative companies like Beacon Power Services, Poa! Internet, Shamba Pride, and Bizao, each addressing vital needs in Africa. Beacon Power Services, for instance, is revolutionizing Africa’s power industry with smart grid solutions, significantly reducing grid energy losses.
This investment by EIB Global, backed by the EU, aims not just at economic growth but at fostering private sector development and reducing economic and social disparities. It represents a strategic alignment with the European Union’s Global Gateway strategy and is a testament to the EU’s commitment to supporting sustainable job creation and prosperity in Africa through venture capital.
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