E3 Capital - Afrikan Heroes

Cavex Gains $6M Funding Boost from E3 Capital for Carbon Initiatives in Africa

October 30, 2023

The Carbon Value Exchange (Cavex) has successfully completed its initial funding round raising $6M. The round was led by E3 Capital and with the participation of FSD Africa Investments (FSDAi). The goal of this funding is to expand its digital carbon financing platform for global scalability. The partnership between E3 Capital and Cavex will also extend an opportunity for E3 Capital’s existing and future portfolio companies to access the carbon markets through this platform.

E3 Capital’s commitment, through its second fund, the E3 Low Carbon Economy Fund (E3 LCEF I), will help Cavex launch an innovative platform that utilizes digital technology to enhance trust, fairness, and transparency in the voluntary carbon markets. Cavex is dedicated to providing access to vital carbon financing for small-scale projects throughout Africa. These projects often struggle to participate due to the high initial costs and time required for carbon credit validation, issuance, and brokerage.

Paras Patel, Managing Partner at E3 Capital

Nick Hughes, CEO and Co-Founder of Cavex, expressed optimism about the investment, stating, “This funding will demonstrate how digital technology can make climate finance accessible to many individuals, communities, and projects that are actively reducing or removing carbon emissions. Cavex has the potential to scale similar to the way mobile money revolutionized finance 15 years ago when Kenya and M-PESA led the global shift toward digital financial services. Moreover, Africa plays a significant role in the evolution of carbon markets, and it’s crucial that we find ways to distribute climate finance more equitably and with genuine socio-economic impact.”

Cavex’s digital platform offers a comprehensive solution that directly connects carbon credit buyers with high-quality projects in the Global South. It employs innovative digital technologies to validate project data, introduce visibility and traceability in project activities, and increase pricing transparency in a market that has been historically fragmented. The platform aims to positively impact the voluntary carbon markets through two key objectives: first, by using high-quality data to reduce participation costs and enhance market integrity, and second, by reducing reliance on intermediaries, ensuring a larger portion of credit sales revenue goes back to project owners and their supporters.

Paras Patel, Managing Partner at E3 Capital, emphasized the importance of expanding access to carbon financing for smaller projects, as it plays a crucial role in promoting inclusivity within the voluntary carbon markets. He stated, “We are delighted to support Cavex and their efforts to unlock verification, trading, and access to finance for projects in Africa. Through digital technology, Cavex’s platform brings integrity and price transparency to the sector, creating a much-needed market mechanism to ensure the equitable distribution of climate finance.”

Cavex is a digital marketplace and payment platform connecting buyers of carbon offsets to impactful projects in the Global South. The platform facilitates access to carbon financing for a wide range of small-scale projects, with a goal to channel over $500 million to projects by 2030. Their innovative model streamlines processes through digital technologies and data capture, reducing the time and costs associated with project validation and carbon credit transactions, and ensuring the majority of funds are directed towards projects and beneficiaries. Cavex is currently active in Kenya and Senegal.

E3 Capital is a prominent investor in early-stage businesses that facilitate digitized, decentralized, and decarbonized business models across Africa. Presently, E3 oversees two Pan-African funds: the Energy Access Ventures Fund, which focuses on energy access and productive use of energy, and the E3 Low Carbon Economy Fund, with a focus on climate tech and digital infrastructure. E3’s team is young, diverse, and dedicated to the future of the low carbon economy. With its core team based in Africa, E3 is uniquely positioned to help companies grow and scale while adhering to global sustainability goals. The team supports forward-thinking entrepreneurs who aim to bridge the gap between climate transition and growth in emerging markets, using green energy as a catalyst for their products and services.

Cavex Africa

Tunisian Fintech Startup My Easy Transfer Attracts $422K Investment to Empower the Tunisian Diaspora

Charles Rapulu Udoh

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

E3 Low Carbon Economy Fund Secures $48.1 Million to Fuel African Startups

May 24, 2023

Paras Patel, the founder and managing partner of E3 Capital

In a remarkable stride towards a greener future, the E3 Low Carbon Economy Fund for Africa (E3LCEF) has achieved its first close, securing an impressive sum of $48.1 million. This groundbreaking fund is a collaboration between early-stage venture capitalist E3 Capital (formerly known as Energy Access Ventures) and Lion’s Head Global Partners, a prominent investment bank focusing on emerging markets.

Among the limited partners of E3LCEF are esteemed organizations such as FMO, the Dutch entrepreneurial development bank; Swedfund International AB, the Swedish development finance institution; Proparco, a subsidiary of the AFD Group dedicated to private sector development investment; and KfW, a development bank in partnership with BMZ, the German ministry for economic cooperation and development. With their support, the fund aims to reach a remarkable target of $100 million, joining the growing ranks of investment vehicles dedicated to supporting startups in Africa’s climate technology sector.

The E3LCEF is set to provide crucial initial and follow-on funding to startups operating within the realm of low-carbon economies. These startups include solar providers and electric vehicle (EV) companies that hold great promise in paving the way for sustainable development in Africa. Recognizing the potential of African businesses to create a significant impact within the low-carbon economy, Paras Patel, the founder and managing partner of E3 Capital, expressed his admiration for the quality of emerging entrepreneurs in the region. He stated, “African businesses are starting to emerge with clear product market-fit and a strong commercial potential at the core within the low carbon economy. The quality of entrepreneurs we are seeing is striking.”

With a shared commitment to fostering innovation and scalability, Patel further emphasized, “We are passionate about helping African entrepreneurs build the next generation of innovative businesses that innovate, scale, and impact the lives of all of us in the coming years.”

Vladimir Dugin, partner at E3 Capital, disclosed that the venture capitalist typically invests between $500,000 and $3 million in seed to Series A startups. With the establishment of the new fund, E3 Capital aims to support businesses across sub-Saharan Africa, adding to its active investment portfolio in the region, which includes the successful management of the €75 million Energy Access Ventures Fund I (EAVFI). The latter has already made 15 investments in decentralized energy enterprises across East, West, and Southern Africa.

Lion’s Head, a reputable asset management firm, currently manages a substantial portfolio worth $700 million. Additionally, its subsidiary offers corporate finance advisory services to governments, multilateral organizations, and private companies. Clemens Calice, CEO of Lion’s Head, expressed enthusiasm for supporting low-carbon businesses in Africa, especially as they begin to exhibit substantial potential for growth. He commended the expertise of the E3 team in working with early-stage companies throughout the continent, noting their existing portfolio’s success in identifying promising ventures.

Amidst a challenging capital landscape, the E3LCEF and other climate-focused funds in Africa play a pivotal role in providing crucial funding to visionary founders spearheading energy transition efforts. These funds also aim to offer solutions that mitigate the effects of climate change and help communities adapt to the rapidly evolving environmental landscape. Notable among these emerging funds is the $200 million Africa People + Planet Fund by Pan-African venture capitalist Novastar, which supports founders dedicated to developing agriculture and climate solutions across the continent. Equator, a climate technology venture capital firm, has also reached the initial close of its fund, focusing on supporting seed and Series A startups in the energy, agriculture, and mobility sectors.