The African Development Bank’s (AfDB) Board of Directors has approved an equity investment of €9.8 million to support venture capital investments in African start-ups, from seed to growth stages.
The Bank said €7 million of the equity investment will be sourced from the African Development Bank’s own resources; while the additional €2.8 million represents funds provided by the European Union (EU) through a partnership with the Organisation of African Caribbean and Pacific States (OACPS).
According to the AfDB, the investment will help Cathay-AfricInvest Innovation Fund meet its target of securing €110 million to invest in over 20 early-stage ventures across sub-Saharan Africa.
“The Innovation Fund focuses on financial inclusion (financial tech and insurance tech), retail and logistics platforms targeting online and mobile consumers, healthcare technologies, and pay as you go, off-grid energy technologies”, the AfDB said.
The Mauritius-based Fund which is jointly sponsored by AfricInvest Capital Partners and Cathay Innovation SAS, has more recently, expanded its focus to include start-ups that are harnessing new digital opportunities created as a result of either the Covid-19 pandemic or with high potential to help fight the coronavirus.
The African Development Bank’s Director for financial sector development, Stefan Nalletamby, said: “The Bank’s approval is another milestone in the implementation of the Boost Africa Programme and its partnership with the EU, OACPS and the European Investment Bank.
“It signals the importance given to tech-enabled high growth entrepreneurs on the continent and the key role of AfricInvest and Cathay Innovation in supporting this key business segment in Africa to achieve Africa’s growth, transformation and integration objectives.”
The Bank added that in its current pipeline, over 40 per cent of projects cover more than one African region; roughly another third of start-ups it invests in are in West Africa, and a quarter of investee start-ups are in the health care sector.
Other investors include German KfW/Allianz GI’s AfricaGrow, public investment bank BPI and development finance institution Proparco, both of France, and Swiss impact investor Obviam.
The Bank’s investment is expected to accelerate the creation of a new class of successful African entrepreneurs that will serve as a model to younger innovators.
It will also support youth and women-led start-ups and increase access and inclusion to financial and ‘real sector’ services and goods through appropriate technology and innovation.
Although venture capital firms invested $2 billion in African tech in 2019, a 73 per cent increase over the previous year, funding from this source for innovative start-ups remains very low in Africa; in addition, very few venture capital funds focusing on early-stage tech start-ups have successfully closed rounds, the Bank stated.
The AfDB’s investment aligns with the Boost Africa programme goals to enhance entrepreneurship and innovation across Africa, create new and quality jobs for young Africans, and contribute to developing an efficient entrepreneurial ecosystem in Africa, the Bank further explained.
Boost Africa, in collaboration with the African Development Bank, the European Union, the Organisation of African Caribbean and Pacific States (OACPS) and the European Investment Bank (EIB), provides financial support to investment funds that target early-stage innovative enterprises across sub-Saharan Africa.
YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE
We Have Not Had Water Supply In Months ― Abeokuta Residents
In spite of the huge investment in the water sector by the government and international organisations, water scarcity has grown to become a perennial nightmare for residents of Abeokuta, the Ogun State capital. This report x-rays the lives and experiences of residents in getting clean, potable and affordable water amidst the surge of COVID-19 cases in the state…AfDB approves €9.8m equity AfDB approves €9.8m equity
Selfies, video calls and Chinese documentaries: The things you’ll meet onboard Lagos-Ibadan train
The Lagos-Ibadan railway was inaugurated recently for a full paid operation by the Nigerian Railway Corporation after about a year of free test-run. Our reporter joined the train to and fro Lagos from Ibadan and tells his experience in this report…AfDB approves €9.8m equity AfDB approves €9.8m equity
and then