Technocrat Media, Abidjan
The Board of Directors of the African Development Bank (AfDB) has approved an equity investment of €9.8 million to support venture capital investments in African start-ups, from seed to growth stages.
According to the Bank in a statement on its website on Tuesday said “the investment is expected to accelerate the creation of a new class of successful African entrepreneurs that will serve as a model to younger innovators.”
The fund which is Mauritius-based is jointly sponsored by AfricInvest Capital Partners and Cathay Innovation SAS according to the AfBD.
“Of the equity investment, €7 million will be sourced from the African Development Bank’s own resources; the additional €2.8 million represents funds provided by the European Union (EU) through a partnership with the Organisation of African Caribbean and Pacific States (OACPS).”, AfDB said.
“The investment will help Cathay-AfricInvest Innovation Fund meet its target of securing €110m to invest in over 20 early-stage ventures across sub-Saharan Africa. The Innovation Fund focuses on financial inclusion (financial tech and insurance tech), retail and logistics platforms targeting online and mobile consumers, healthcare technologies, and pay as you go, off-grid energy technologies.”
It added that the Bank’s Innovation Fund has expanded its focus to include start-ups that are harnessing new digital opportunities created as a result of the Covid-19 pandemic, or with high potential to help fight the coronavirus.
Speaking on the development, Stefan Nalletamby, AfDB director for financial sector development, said: “The Bank’s approval is another milestone in the implementation of the Boost Africa Program and its partnership with the EU, OACPS, and the European Investment Bank. It signals the importance given to tech-enabled high growth entrepreneurs on the continent and the key role of AfricInvest and Cathay Innovation in supporting this key business segment in Africa to achieve Africa’s growth, transformation, and integration objectives.”
“In its current pipeline, over 40% of projects cover more than one African region. Roughly another third of the start-ups it invests in are in West Africa. A quarter of investee start-ups are in the health care sector.”
AfDB also other investors which include German KfW/Allianz GI’s AfricaGrow, public investment bank BPI and development finance institution Proparco, both of France, and Swiss impact investor Obviam are involved in the fund.
“The Bank’s investment is expected to accelerate the creation of a new class of successful African entrepreneurs that will serve as a model to younger innovators. It will also support youth and women-led start-ups and increase access and inclusion to financial and ‘real sector’ services and goods through appropriate technology and innovation.”
Although venture capital firms invested $2 billion in African tech in 2019, a 73% increase over the previous year, funding from this source for innovative start-ups remains very low in Africa. In addition very few venture capital funds focusing on early-stage tech start-ups have successfully closed rounds, AfDB added.
The investment aligns with the Boost Africa program goals to enhance entrepreneurship and innovation across Africa, create new and quality jobs for young Africans, and contribute to developing an efficient entrepreneurial ecosystem in Africa.
Boost Africa, a collaboration between the African Development Bank, the European Union, the Organisation of African Caribbean and Pacific States (OACPS), and the European Investment Bank (EIB), provides financial support to investment funds that target early-stage innovative enterprises across sub-Saharan Africa, the statement indicated.
Excellent journalism is expensive. It is only the same that can help to build our society and country to entrench good governance, development and ensure justice for all.
We need your support for investigative findings and special reports to demand accountable and transparent government. DONATE today to help us stay relevant to serve your quest for accurate and authentic stories.
DONATE TO 0450702364, naira OR 0657626454, USD – GTBANK
TECHNOCRAT INNOVATIONS PLUS LTD
![](https://dailyagent.ng/wp-content/uploads/2023/08/DAILYAGENT-SMALL.png)