Startups in Tunisia have some great news. A $75m fund, backed by the World Bank and supported by German Cooperation, has been launched for startups in the country. Also launched are the “Anava” Fund of Funds and the “Startups and Innovative SMEs” project. The project, which will run for 7 years, was designed to support the government’s “Startup Tunisia” program, which aims to catalyze the creation and growth of digital and innovative startups and SMEs, and by ricochet, stimulate economic and employment prospects for young Tunisians.

Here Is What You Need To Know

• The project is being championed by the Caisse des Dépôts et Consignations (CDC), Smart Capital, the BM and the GIZ, at the Palais du Baron d´Erlanger (Ennejma Ezzahra) in Sidi Bou Saïd.

• The project will finance the subscription of the CDC to the Fund of Funds called “ANAVA”. The target size of the ANAVA fund is 200 million euros (approximately 655.5 million dinars). The ANAVA Fund will support the financial and growth needs of startups. 

• ANAVA is co-financed by the German Development Bank (KfW) which will manage funds from the European Union and Germany.

How The Fund Will Work

• The “Startups and Innovative SMEs” project will finance equity or quasi-equity investments in innovative startups and SMEs, as well as render assistance for concept development, improvement of investment receptivity and technology adoption.

• In addition to the Fund of Funds, the project includes a second ecosystem support component called “FlyWheel”, also co-financed by the World Bank and GIZ Tunisia.

• This component will help actors in the entrepreneurial ecosystem — especially business incubators and accelerators — to improve and extend the reach of their programs, including startups and SMEs led by women or located in development regions.

What About Anava?

• As for the “Anava” fund of funds, an essential component of the “Startups and Innovative SMEs” project, it was also launched at the same time, with a first closing (last stage of fundraising) of 40 million euros (approximately 130 million Tunisian dinars).

• This is one of the key pillars of the national Startup Tunisia initiative, which aims to make Tunisia “a country of Startups at the crossroads of the Mediterranean, the MENA region and Africa”.

• ANAVA will contribute to the promotion and financing of startups and innovative companies, and will thus make it possible to create wealth in an inclusive manner, generate jobs with high added value and promote the spirit of initiative among young Tunisians.

• Its mission: to acquire a stake in collective investment funds or any category of mutual funds (the underlying funds) dedicated to startups and innovative companies and covering all their phases of life and development.

• These include, in particular, underlying funds focused on seed or Seed stage funds, Early stage funds (funds focused on the initial stages of development of startups); Late Stage funds (funds focused on the advanced stages of development of innovative companies).

• The ANAVA Fund is managed by SMART CAPITAL, the operator of the national Startup Tunisia initiative which aims to make Tunisia a Startup Friendly country (or friend of startups). 

• According to Meriem Zine, investment director at Smart Capital and responsible for leading the ANAVA Fund of Funds, this is the first fund of funds in Tunisia.

• It is a regional fund with a maturity of 20 years, with the program investing in at least 16 funds dedicated to startups and funding around 350 startups.

• Smart Capital also manages the Startup Act.

450 Startups Already Labelled

• The Minister of Communication Technologies, Mohamed Fadhel Kraiem, present at the launching ceremony of the said project, underlined the importance of the “Startups and Innovative SMEs” project which is based on three components: regulatory (Startup act), financial (Fonds de Fund and Flywheel) and a third component which will be focused around the development of a framework that will allow the administration to access innovative solutions in all areas, through the involvement of startups and innovative SMEs / SMIs.

• He said that since the adoption of the Start Up Act in April 2019, no less than 450 startups have been labeled out of around 750 candidate startups, an average of 20 startups per month, affirming that the labeling dynamic has been maintained despite the pandemic, which reflects its durability.

Read also: What Difference Have Startup Acts Made In African Countries Where They Exist?

Lessons from Tunisia’s seeming success with its Startup Act

Tunisia’s Startup Act has largely succeeded because of a collaboration between the public and private sectors. For instance, Smart Capital, the company in charge of administering the Tunisian Startup Act is privately managed, although with public shareholding. The company was approved by the Tunisian Financial Markets Council, and works with the country’s Ministry of Communication Technologies and Digital Economy and the Ministry of Finance. Smart Capital’s mission is simple and straight-forward: design and implement the Startup Tunisia initiative (including among others, the Startup Act and the Fund of Funds ANAVA), in order to make Tunisia a country of startups at the crossroads of the Mediterranean, MENA region and Africa.

Thus, handing over the administration of the Act to a private entity has saved the Act from the bugs of bureaucracy and inefficiencies that eat up most government commissions and agencies in Africa. The company has been promoting Tunisian startups and planning several launches of funds in support of startups, recently.

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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