The African Development Bank (AfDB) has taken a significant step in supporting the growth of innovative African businesses by agreeing to invest USD 10.50 million in Seedstars Africa Ventures S.L.P. (SAV), a venture capital fund targeting high-potential companies across Sub-Saharan Africa.
In a decision reached by the AfDB’s Board of Directors on Wednesday, the bank will contribute USD 7 million from its ordinary resources and an additional USD 3.5 million from the European Union Boost Africa programme. This strategic equity investment is aimed at enabling Seedstars Africa Ventures to expand its footprint, raise funds, and attract further investments for innovative startups with substantial growth potential.
Seedstars Africa Ventures is an early-stage venture capital fund with a focus on high-growth companies operating in Sub-Saharan Africa. The fund, with a capital of USD 75 million, specifically targets the startup and launch phases of businesses addressing key market constraints, particularly in French-speaking countries such as Senegal, Côte d’Ivoire, Benin, and Cameroon, as well as in Ghana, Uganda, and Tanzania.
The fund’s investment strategy aligns with its emphasis on financial inclusion and technology adoption in various sectors, including fintech, insurtech, retail sales, logistics platforms, health technologies, pre-paid off-grid energy, and technology adoption in the food-processing industry and value chains.
Seedstars Africa Ventures plans to make initial investments around the EUR 250,000 mark, followed by additional capital injections of €5 million to support the growth of the selected businesses. The fund estimates that this initiative will contribute to the creation of 9,000 full-time jobs, with 50% of them designated for women, thereby having a significant economic impact.
This move is in line with the objectives of the Boost Africa program, which seeks to invest in innovative startups with robust growth potential and positive social impact. Additionally, it supports the African Development Bank’s High 5 priorities by fostering entrepreneurship, encouraging investments, and promoting economic growth with a focus on critical sectors such as agriculture, health, industrialization, and off-grid energy.
By strengthening regional integration and improving the lives of people in Africa, these investments are poised to play a crucial role in achieving sustainable development goals, further solidifying the African Development Bank’s commitment to reducing poverty through entrepreneurship and investment in key sectors.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard.