February 21, 2024

The Board of Directors of the African Development Bank (AfDB) has approved a capital investment of $10.5 million in a venture capital fund to support innovative African businesses displaying strong growth potential.

AfDB is to contribute $7 million from its ordinary resources and $3.5 million from the European Union Boost Africa program.

Nairametrics learns that the funding will empower Seedstars Africa Ventures (SAV) to raise additional capital, expand its footprint in Africa, and attract further investment. SAV focuses on early-stage investments in high-growth companies operating across Sub-Saharan Africa.

  • What the fund is set to achieve

Aligned with Boost Africa’s goals, the fund seeks to invest in innovative startups with robust growth and positive social impacts. This investment strategy reinforces the African Development Bank’s approach, connecting entrepreneurship, investment, economic growth, and poverty reduction.

Additionally, it supports the Bank’s High 5 priorities by backing startups in key sectors such as agriculture, health, industrialization, and off-grid energy. Ultimately, these investments contribute to regional integration and enhance the lives of people across Africa.

The fund concentrates on high-potential businesses addressing market challenges and generating income, with a primary focus on sub-Saharan Africa.

As a $ 75 million venture capital fund, Seedstars Africa Ventures (SAV) targets startups addressing market constraints during their initiation and launch phases. Initial investments hover around €250,000, with subsequent capital injections of €5 million to support further growth.

SAV prioritizes financial inclusion, technologies aiding businesses (fintech and insurtech), retail sales and logistics platforms targeting online and mobile consumers, health-related technologies, prepaid off-grid energy, and the broader adoption of technology in businesses, especially in the food-processing industry and value chains.

The fund is also expected to generate 9,000 full-time jobs, with half of them being for women, contributing significantly to the economy.

Nairametrics

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