Novastar Ventures announced last week that it had held the final close for Novastar Ventures East Africa Fund I at $80 million at the end of September with a commitment from FISEA, an investment fund advised by PROPARCO, the French development finance institution. Other partners who had already made commitments to the fund, which was launched in 2013, include fellow European DFIs CDC, FMO, Norfund and the European Investment Bank, as well as private institutions J.P. Morgan, AXA Investment Management and Triodos Bank.
The fund has already backed eight businesses, all of which demonstrate the characteristics favored by the fund—mass-market scale potential, business model innovation and entrepreneurial leadership. By backing early and growth stage businesses which meet proven demand for basic goods and services, with innovative business models that widen access, improve quality and lower the cost of basic goods and services, the fund aims to achieve positive social impact as the result of its portfolio companies’ commercial success.
The fund invests as little as $100,000 in unproven business models which it believes have high potential and has the scale and flexibility to direct support appropriate to a company’s particular stage of development. Starting off with small initial funding rounds, the fund can help push rapid growth with more that $6 million through multiple follow-on capital rounds.