AfDB to Stake $10.5m in Seedstars Africa to Boost Investment Fund

January 18, 2024
Seedstars Africa

By Adedapo Adesanya

The African Development Bank (AfDB) is staking $10.5 million in Seedstars Africa Ventures S.L.P. to boost the investment basket of the venture capital fund to enable it to invest in innovative African businesses with strong growth potential, particularly in the agri-food value chain.

Seedstars Africa Ventures is an early-stage venture capital fund investing in high-growth companies active across Sub-Saharan Africa. The $10.5 million investment will allow the firm to raise funds, expand its presence in Africa, and attract other investors.

AfDB noted that the investment will also contribute to the bank’s operational priorities known as the High 5 – by supporting start-ups operating in key sectors, such as agriculture, health, industrialization, and off-grid energy.

The board of the Addis-Ababa-based lender agreed to invest $7 million from its ordinary resources and another $3.5 million from the European Union Boost Africa programme.

Seedstars, with a capital fund of $75 million, has a core focus on businesses that have strong potential, are generating income, and tackling key challenges in the market. It aligns with the AfDB’s goal to link entrepreneurship, investment, and economic growth to poverty reduction and sustainable development.

It mainly targets sub-Saharan Africa, especially markets less well covered by traditional investors, and enjoys a particular focus on French-speaking countries such as Senegal, Côte d’Ivoire, Benin, and Cameroon. However, it also has investments in Ghana, Uganda and Tanzania.

Seedstars Africa targets the start-up and launch phases of businesses tackling key constraints in the market. Initial investments are around the €250,000 mark, followed by additional capital injections of €5 million to support their growth.

Seedstars focuses on financial inclusion and the technologies that equip businesses (fintech and insurtech); retail sales and logistics platforms that target the online and mobile consumers market; health-related technologies; pre-paid, off-grid energy; and more generally, the adoption of technology in businesses, particularly in the food-processing industry and value chains.

It is estimated that the fund will help create 9,000 full-time jobs, with women-focused inclusion, and have a significant economic impact.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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