US$120m fund to nurture talents and develop businesses in Africa

13Feb 2018
The Guardian
US$120m fund to nurture talents and develop businesses in Africa

Tanzania is among eight countries in sub-Saharan Africa (SSA) with the strongest need for venture capital that will benefit from a new fund seeking to help develop talents and businesses in the region.

The US$120 million Africa fund being promoted by Partech Ventures will also benefit promising teams using technology to solve massive socio-economic problems in Cameroon, Côte d’Ivoire, Ghana, Kenya, Nigeria, Senegal and Uganda.


The Europe-based firm says specializing in information and communication technologies says the new fund will become the largest venture-capital fund focused on digital-technology start-ups in sub-Saharan Africa.


“Partech Africa fund will be open to countries across Africa, although eight countries show the strongest need for venture capital: Cameroon, Côte d’Ivoire, Ghana, Kenya, Nigeria, Senegal, Tanzania, and Uganda,” reads the statement on the development.


“The fund has secured over €57 million (US$70.74 million) commitments so far, will provide early-stage growth funding—in amounts ranging from €500,000 (US$620,540) to €5 million (US$6.21 million)—for start-ups in a variety of sectors. These include financial technology, health technology, and mobile technology,” it adds.


Partech Ventures currently manages €850 million (about US$1.05 billion) across three separate funds, each dedicated to different stages of investment: seed, start-up and growth. In 2014, the Preqin rankings rated it as one of the top ten venture capital firms in the world and the best in Europe (the only European firm in the top thirty).


The ICT sector is critical to economic growth and prosperity in Africa—digital technology is expected to contribute about US$300 billion to the region’s gross domestic product by 2025, according to the McKinsey Global Institute.


“With a very hands-on and operational team, closing more than 70 transactions per year, Partech will bring a great value to African founders,” Tidjane Dème, General Partner for Partech Africa, said.


“Moreover, thanks to our global network of corporate partners, our dedicated business development team will expose African startups to European and US markets, enabling commercial contracts and long-term strategic partnerships,” he says. 


The Africa fund will target industries ranging from Financial Inclusion (Fintech, InsurTech, new distribution models) to online and mobile consumer services (commerce, entertainment, education, digital services), as well as mobility, supply chain services and digitization of the informal economy.


Partech Ventures said in the statement that the US$70 million so far successfully closed by Africa fund follows commitments from institutional investment partners led by International Finance Corporation (IFC) the development arm of the World Bank, European Investment Bank (EIB) and corporate partners such as telecoms giant Orange. The company said it is still raising and plans to reach its US$120 million mark.


Though investments in African start-ups have continued to increase over the years culminating in US$195 million last year according to tech news Disrupt Africa, there still exists a gulf in seed funding for young entrepreneurs and technology up starts. According to polls gathered last year by tech news site Enterprise54 and entrepreneurship training firm Leap Africa, lack of funding ranks first on the list of challenges of entrepreneurs in Nigeria. 


Commenting on the launch of Partech Africa, Chief Executive Officer of IFC, Philippe Le Houérou said: “Africa’s population is overwhelmingly young. It has lots of people with strong tech skills and innovative ideas that could improve lives. But they lack the necessary funding. We think the Partech Africa fund will make an important contribution to closing this funding gap and driving entrepreneurship and growth.”


Partech Africa has opened offices in Dakar, Senegal, and has begun operations seeking promising technology teams to invest in.


Two African technology veterans, Cyril Collon who held various executive positions at global mobile and internet solution companies, with a consistent focus on Africa and the Middle East, and Dème who spent 7+ years in executive roles at Google in Africa and led YouTube’s strategy in the region, have been appointed to manage the Africa fund.



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