African startups have one other $100 million in VC to pitch for after Novastar Ventures’ newest increase.

The Nairobi and Lagos based mostly funding group introduced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s complete capital to $200 million.

With the extra sources, the agency plans to make 12 to 14 investments throughout the continent, in accordance with Managing Director Steve Beck. He spoke to TechCrunch on Novastar Ventures’ plans for the brand new fund.

A notable replace to Novastar’s VC focus is geographic scope. The agency was initially co-founded in Kenya by Beck and British investor Andrew Carruthers and constructed its first portfolio largely round firms based mostly in East Africa. Novastar Ventures made 15 investments with its first fund, together with firms resembling Uganda and Kenya centered power startup SolarNow and agtech enterprise M-Farm.

“The second fund is principally the identical technique as the primary, however…the most important distinction is that we opened up a second entrance in West Africa — extra significantly to be in and across the entrepreneurial system in Lagos,” Beck instructed TechCrunch on a name.

Earlier than closing its Africa Fund II, Novastar Ventures had already made a number of investments in West Africa, together with main a spherical in Nigerian on demand motorbike transit startup Max.ng and backing Ghanaian well being firm, MPharma. Novastar opened an workplace Lagos in 2019.

On the kinds of startups Novastar will goal with its new fund, the main target is extra on mission than business silos, in accordance with co-founder Steve Beck. “We’re sector agnostic. I might describe us extra as a phase fund than a sector fund,” he mentioned.

“We actually attempt to search for companies known as breakthrough companies, [those] which are addressing the most important issues within the largest markets.”

That has led Novastar Ventures to put money into digital firms in schooling, data entry, agtech, mobility and off-grid power.

“Primarily what we’re doing is on the lookout for these companies which are addressing the essential wants, primary items and providers throughout the true mass markets of the continent,” mentioned Beck.

On whether or not the agency is a devoted affect fund, Beck mentioned, “The best way we characterize ourselves is we’re a business enterprise fund with an affect display screen.”

On funding quantities and kinds, Novastar Ventures is pretty versatile on ticket measurement, from seed to later stage.

“We’re gonna…have some portfolio firms the place we put to work 1,000,000 {dollars} or much less or have been going to have some the place we put $eight or $9 million {dollars} in by capital rounds. That’s…the deployment technique,” Beck mentioned.

Novastar Ventures works intently with its portfolio firms, in accordance with its co-founder.

“We’re very lively traders and all the time take a board seat to be near the entrepreneurs. We regularly are the primary institutional investor that they’ve.”

Africa Top VC Markets 2019

Picture Credit: TechCrunch

Startups who need to pitch to the corporate can attain out to the fund’s founders and administrators through the web site or LinkedIn, in accordance with Beck. He added that Novastar Ventures is recruiting so as to add one other member to its investor group in 2020.

The agency’s newest increase and $200 million capital quantity creates one other excessive worth fund centered on African startups.

On the excessive finish of estimates, the continent’s tech ecosystem reached $2 billion in VC to startups in 2019, in comparison with lower than half a billion greenback 5 years in the past.

Different massive Africa centered VC retailers embody TLcom Capital — which closed a $71 million fund in February —  and Partech, which doubled its Africa fund to $143 million in 2019. The enterprise arms of main international firms have additionally develop into extra lively in African tech lately, together with that of Goldman Sachs and Visa.



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