For startups in West and East Africa, this may be the best time to get ready to pitch to Novastar Ventures, the venture capital firm that has previously invested in African startups such as the ride-hailing platform Max.ng, Ghana’s healthtech mParma, East Africa-focused cleantech Solarnow. Just sealed at US$108 million is the venture capital firm’s Africa Fund II which will be devoted entirely in investing in innovative businesses based only in East and West Africa.
“The COVID-19 pandemic has obviously compounded the significant challenges for entrepreneurs building businesses in our territories. The strongest entrepreneurs will seize the opportunities that arise during the crisis, and we expect to see more entrepreneurial talent released from “safe jobs” that are no longer safe,” said the firm’s co-founder and managing partner Andrew Carruthers.
Here Is What You Need To Know
- Participating in the latest round are investors such as the CDC Group, European Investment Bank, Dutch Good Growth Fund, FMO, Proparco, Norfund and SIFEM.
- According to co-founder and managing partner Steve Beck Novastar was grateful to its investing partners who had helped it capitalise NVAF II at the beginning of this difficult period.
“Many of the world’s most innovative, successful businesses today were born out of recessions and crises of various kinds. Our investment strategy is well suited to this environment. We back breakthrough businesses that serve the common good; ones that will have staying power and profoundly positive impact precisely because they are innovating ways to address basic needs and the biggest challenges in our region,” he said.
- As with Novastar Ventures’ first fund, NVAF II is a multi-round investor with the scale and flexibility to tailor support to each portfolio company’s stage of development, from seed to scale. While the first fund was limited to East Africa, NVAF II expands its geographic reach to West Africa.
“While Novastar now manages more than $200 million of capital, we don’t think of ourselves primarily as fund managers. The focus and real interest in our work is partnering with high-capacity, ambitious entrepreneurs to help them bring their ideas to life and multiply their impact,” said the firm’s co-founder and managing partner Andrew Carruthers.
The Investment Pattern Of The VC Novastar Ventures
Novastar Ventures invests mostly in technology-based solutions, wearing mostly a sector agnostic look. It has invested in everything from Agritech (GreenPath), to edtech( Bridge), news site (hivisasa), to job platforms (Lynk), to mPharma, as well as logistics and mobility (Max.ng); however it seems the VC has more portfolios in agritech and cleantech.
The VC says it looks for market potential, focused strategies, business model innovation, and a fundamental alignment between commercial success and positive social impact. But the quality of the founders trumps these, it says.
“We invest in people first, plans second. Why? When assessing an early stage venture, the only thing certain about the business plan is that it is wrong. Neither we, nor the founders, yet know exactly where it’s wrong, but there are inevitably assumptions that will prove incorrect. The quality of the founding team, their resilience, courage and insight to make course corrections is paramount,” the VC says.
We back entrepreneurs with character, capacity and ambition to build businesses that can transform markets and grow rapidly to scale. Our assessment is not formulaic; what follows is not a checklist. We inevitably make subjective judgments about entrepreneurs we meet. Hopefully the characteristics outlined below stimulate further thought and self-reflection,” it further adds.
In other words, the VC focuses more on who runs the business than on the business itself, with their watchwords on entrepreneurs being Integrity, Audacity or risk-taking, Resilience, Humility among other qualities.
Interested in the new fund, follow here: https://novastarventures.com/contact/
A Look At The VC Novastar Ventures
With offices in Nairobi and Lagos, Novastar is one of the largest platforms dedicated to financing early and growth stage businesses in Africa. The firm backs startups that address proven demand for basic goods and services with innovative business models.
The company’s first fund of US$80 million, together with a US$12.5 million co-investment facility, backed 15 companies and continues to invest follow-on capital into the successful businesses in its portfolio.
NVAF II — which held its first close in November 2018 — targets new early and growth stage businesses, and has total commitments of US$108 million.
NVAF II has already led or co-led financing rounds in three companies: Nigerian on-demand motorcycle ridesharing and logistics company Metro Africa Xpress (MAX), Ghanaian tech-driven healthcare company mPharma, and Nigerian cooling tech company Sure Chill.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
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