KfW - Afrikan Heroes

German Bank KfW To Commit $44.7M To Partech Africa New Fund Focused On African Startups

August 24, 2022

The German Federal Ministry for Economic Cooperation and Development (BMZ) has indicated that the KfW Development Bank will invest up to 45 million euros ($44.7 million) in the Partech Africa fund II, which will finance African startups and small and medium-sized enterprises (SMEs) active in the digital sectors.

Stephanie Lindemann-Kohrs, KfW’s Head of Equity Finance

“KfW is pleased to serve as the lead investor in the Partech Africa Fund II. We share the aim of assisting innovative entrepreneurs who are driving digital innovation in Africa while also stimulating the growth of the African venture capital ecosystem,” said Stephanie Lindemann-Kohrs, KfW’s Head of Equity Finance.

The bank will join a diverse group of international financial institutions and investors that have already signalled their intention to participate in the second Partech Africa venture capital fund. The International Finance Corporation (IFC), for example, proposes to spend $25 million in it, as does the Dutch Development Finance Bank.

The company hopes to improve its strategy of discovering and promoting technical innovation, as well as the next generation of African market leaders, with this second fund. The vehicle will appeal to technological firms in all stages of development, from seed to growth, with start-up financing ranging from $1 to $15 million. It will follow the same investment approach as Partech Africa I, but will raise twice as much money.

Partech Africa I was launched in early 2018 and concluded a year later, with total commitments of roughly €125 million. It has invested in 16 companies based in nine countries. Meanwhile, the new fund will capitalise on the prospects given by the fast increasing African tech industry in 2021, with a total of $5.2 billion raised by 640 start-ups in 681 rounds, according to the annual report of 2021 from Partech Africa on venture capital investment for African startups.

India Finally Allows Local Venture Capital Firms To Invest Abroad. What Could This Mean For African Startups?

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. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh

AfricInvest Innovation Fund Just Got Bigger By $19.4 Million, Courtesy Of AfricaGrow

November 5, 2020

Startups and businesses in Africa have more money to tap from, courtesy of AfricaGrow fund of funds (FoF), launched by Allianz Global Investors, which has committed $19.4m into Cathay AfricInvest Innovation Fund (CAIF), managed by AfricInvest. AfricaGrow, which is the product of a public-private cooperation between KfW Entwicklungsbank (on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ)), Allianz and DEG, launched November last year with a target volume of €200m.

*Jan Martin Witte, Director of the equity finance department of KfW*

Jan Martin Witte, Director of the equity finance department of KfW, said: “With the AfricaGrow fund of funds, KfW Entwicklungsbank is implementing a key initiative of the development investment fund, which was launched by Chancellor Merkel during the “Compact with Africa” summit in Berlin in October 2018. We are pleased that with Allianz Global Investors we have found a competent partner who drives forward the implementation of the fund of funds’ investment strategy.”

“We are convinced that these initial investments will make a significant contribution to the creation of growth and jobs in Africa.”

Here Is What You Need To Know

AfricaGrow has now made its first two investments of around €15m each into SPE AIF I and the CAIF.
SPE AIF I is a target fund of SPE Capital Partners, a private equity fund manager based in Tunisia.
It focuses on investments in portfolio companies located in North Africa and with strong growth potential in sectors such as manufacturing, services, logistics, healthcare and education.
Currently, the target fund is invested in four portfolio companies in Egypt, Morocco and Tunisia.

“Through the cooperation with SPE Capital Partners and AfricInvest, we have found excellent partners who have convinced us with their extensive network and local expertise and who mirror the investment strategy of AfricaGrow,” Martin Ewald, Managing Director and Lead Portfolio Manager Impact Investments of Allianz Global Investors, said.

“The two investments lay the grounds for a balanced portfolio, which we will enrich in the near future with further capital placements in the African market,” he added.

About AfricInvest

AfricInvest, based in Tunisia, is pursuing a pan-African growth strategy through its VC fund, CAIF.

It focuses on potential market leaders whose goal is to introduce established global technology concepts to the African region and to stand out mainly through innovative technologies.

CAIF has invested in three portfolio companies so far.

One of them is, for example, a company that offers an operating system for conventional cell phones (in contrast to the very high cost of a smartphone in Africa compared to the average employee’s earnings), thus also enabling the lower middle class to participate in the digital world, for example through digital payment transactions or low cost communication.

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

$188m German AfricaGrow “fund of funds” Launched For African Startups

November 23, 2019

For one thing, 2019 has seen a deluge of investment in African startups. German-headquartered KfW Development Bank has just joined the train. Partnering with Allianz Global Investors, KfW Development Bank has set up a EUR170 million (US$188 million) “fund of funds”, called AfricaGrow, which aims to help Africa’s private equity and venture capital funds make investments in startups and SMEs on the continent.

‘‘The design and structure of the new AfricaGrow Fund is a milestone in support for the African economy. It is intended to help small and medium-sized enterprises, primarily in reform-oriented African countries, close the existing financing gap and build a solid equity base. In Africa’s economy it is mainly the small, local companies that create the most jobs and thus contribute significantly to securing people’s incomes,” said Dr Joachim Nagel, member of KfW Group’s executive board.

Here Is All You Need To Know

Launched on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the KfW fund, called AfricaGrow which will be managed by Allianz, and will finance 150 innovative businesses through local funds by 2030 in order to promote sustainable economic and social development.
The fund volume stems from cooperation between public and private partners and is initially EUR170 million.
Half of that — EUR 85 million (US$94 million) — comes from the Federal Ministry for Economic Cooperation and Development (BMZ), plus another EUR 30 million (US$33 million) from KfW subsidiary DEG and EUR55 million (US$61 million) to EUR70 million (US$78 million) from Allianz companies.
The AfricaGrow Fund is designed as a fund of funds for promoting small and medium-sized enterprises (SMEs) and start-ups primarily in countries associated with the G20 Compact with Africa (CwA). The AfricaGrow Fund aims to have a catalytic effect on the emerging and dynamic SME and start-up e cosystem and thus promote jobs and income across the CwA countries. The objective is to help these countries attract private investment along with technical and fnancial assistance, in return for reforms that improve the business climate, e.g. fghting corruption or improving good governance.
Acting as a strong and reliable anchor investor, the Fund will allow partnering venture capital (VC) or private equity (PE) funds to raise private capital more easily. To this end, the AfricaGrow Fund will be set up as a structured fund. KfW, on behalf of the German Ministry for Economic Cooperation and Development (BMZ), will provide a frst-loss tranche on the fund-of-fund level. It is expected that this will leverage additional funding by DEG — Deutsche Investitions- und Entwicklungsgesellschaft mbH as anchor investor and other investors for the emerging African VC and PE fnancing sector.
The German Federal Government is providing an additional budget in the tens of millions for accompanying support measures.

Who Will Benefit From The Fund?

The fund is designed to address the fnancing needs of SMEs across multiple industrial sectors and technology-based start-ups (e.g. FinTech, off-grid, AgTech, EdTech, HealthTech, mobility, e-commerce), especially those that pursue innovative business models (e.g. pay as you go) and have strong growth potential and a clear focus on exports, including cluster-based growth models. It will also provide funding for technical support in building managerial capacities.

The AfricaGrow Fund Will Work With Local Fund Managers and VCs To Invest In African Startups

The AfricaGrow Fund will work with Pan-African regional and country-specific funds with proven track records and capacities, primarily in CwA countries. These are: Benin, Burkina Faso, Côte d’Ivoire, Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal, Togo and Tunisia. Generally, the AfricaGrow Fund will invest in market-oriented funds with a strong private-sector approach.

Comments:

From the look of things, the fund is accessible to all African startups, but special attention would be given to CwA countries — Benin, Burkina Faso, Côte d’Ivoire, Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal, Togo and Tunisia.

For startups interested in accessing the fund, enquiries may be made at Allianz Global Investors, who would be the lead manager of the fund and who would determine which venture capital firm or private equity company in your country that is qualified to be part of the funding scheme. In other words, you may only get the funding through VCs in your country appointed by Allianz Global Investors.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world