Seedstars Africa Ventures Secures $30M Backing from EIB Global to Invest in Early-Stage Startups
Seedstars Africa Ventures, a Pan-African venture capital fund, has received a significant boost with a $30 million capital commitment from EIB Global, the arm of the European Investment Bank. This marks the fund’s first major institutional investment and brings its total capital raised to $38 million, following an $8 million investment from French private equity firm LBO France.
The objective of Seedstars Africa Ventures is to close its fund at between $80 million and $100 million, with a focus on backing seed and series A startups and offering follow-on funding up to Series B. By bridging a significant capital gap and providing support beyond accelerator programs, the fund aims to foster the growth of early-stage startups on the African continent.
To achieve its goals, Seedstars Africa Ventures has joined forces with Seedstars Group, an emerging markets accelerator. This partnership allows the VC firm to leverage the infrastructure and market access provided by Seedstars Group, enhancing its ability to identify and invest in promising startups across Africa.
Maxime Bouan, one of the partners at Seedstars Africa Ventures, highlighted the need for increased capital at the early-stage investment stage in Africa. When the team launched in 2020, there was very little capital available beyond acceleration, so there was a clear need to provide more capital at this stage, said Bouan. He added that the fund aims to be pan-African and provide hands-on support to portfolio companies through targeted early-stage investments.
Seedstars Africa Ventures plans to make initial investments ranging from $250,000 to $2 million, with follow-on funding of up to $5 million, in approximately 30 startups. Beyond the financial support, the fund also offers entrepreneurs access to Seedstars tools, networks, and visibility. This comprehensive approach of providing capital and strong support is relatively rare in the African startup ecosystem.
While Seedstars Africa Ventures remains sector-agnostic, it has expressed a particular interest in startups that address basic needs, such as education, healthcare, and utilities. The fund is also keen on investing in tech startups but is open to supporting innovative brick-and-mortar businesses that benefit from digitalization.
Furthermore, Seedstars Africa Ventures plans to allocate up to 50% of its investments in Francophone Africa. This region presents attractive investment opportunities due to lower competition, a sizable market, and the availability of high-quality and better-priced deals compared to more mature Anglophone regions.
The fund has already made investments in four businesses with the initial funding from LBO France. These investments include Kenya’s internet service provider Poa Internet, Nigeria’s SaaS grid management platform for electricity distribution utilities, Beacon, agritech company Shamba Pride, and payments company Bizao. With the new capital injection from EIB Global, Seedstars Africa Ventures is set to accelerate its investments and fuel the growth of even more innovative startups in Africa.
Seedstars Group, the parent company of Seedstars Africa Ventures, has also invested in 26 other companies in Africa through its Seedstars International Ventures Funds I and II.
The partnership between Seedstars Africa Ventures and EIB Global signifies a significant milestone in African venture capital, as it combines substantial financial backing with comprehensive support for early-stage startups. With the emerging startup ecosystem in Africa, this investment is poised to help innovative entrepreneurs thrive, address pressing challenges, and contribute to the growth and development of the continent’s economy.
