The African Development Bank’s efforts to channel critical investment funding to Africa’s entrepreneurs received a big boost on October 18 in Abidjan, where the Bank’s executive directors approved €7 million equity investment in Partech Africa Fund.
Partech is a Venture Capital Fund dedicated to investing in tech-enabled, innovative, high growth potential and talented entrepreneurs operating early stage companies and applying relevant technologies to address fundamental market constraints with a potential to scale across the continent.
With hubs/offices in Dakar, Nairobi and planned for Lagos, the Fund is targeting nine Sub-Saharan African countries (South Africa, Ghana, Nigeria, Ivory Coast, Cameroun, Senegal, Tanzania, Kenya, and Uganda).
It focuses on i) financial inclusion (fintech, insurtech, pay as you go, off-grid energy) ii) online and mobile consumers; and iii) more broadly on tech adoption in enterprises especially in industry, education, logistics and transport, health, and agriculture value chain applications.
According to papers presented to the Board, the Fund has successfully completed its first close in January 2018 with €71 million and is targeting a total fund size of at least €100 million through a 2nd round expected to be closed by October/November 2018.
Under the framework of the Boost Africa Program, the Bank will provide €7 million equity investment in the 2nd close. The contributions from both the African Development Bank and the European Investment Bank form part of the Boost Africa Programme, which assists Partech in its fundraising. The Bank is expected to have a seat in the Advisory Board of the Fund.
The fund’s focus aligns well with the Boost Africa objectives to invest in high growth innovative start-ups with a strong social / Base of the Pyramid outreach and impact.
Some of the projected development outcomes include:
- Promoting profitability and growth of high value-generating companies;
- Stimulating strong job growth (2,891 direct jobs and 19,090 indirect jobs), and
- Increasing access and inclusion to financial and ‘real sector’ services and goods through appropriate technology and innovations;
- Creating more efficient markets with deeper access for poorer segments of society.
Underscoring the strategic importance of the investment, Stefan Nalletamby, Director, Private Sector, Infrastructure & Industrialization Department said:
“By participating in the Fund, the Bank will support the successful launch of the first large Venture Capital fund covering four key regions in Africa, supporting entrepreneurs to leverage additionality and technology to develop affordable, user-centered products and services and market-driven complementarity.”
Original source: AfDB
Published on 18 October 2018
