The Board of Directors of the African Development Bank (AfDB) has endorsed a €9.8 million equity investment to stimulate venture capital investments in African entrepreneurs at all stages of development.
The African Development Bank (AfDB) will provide €7 million from its own funds to the equity fund, while the European Union (EU) will invest €2.8 million in partnership with the Organization of African, California and Pacific States (OACPS).
Cathay-AfricInvest Innovation Fund will use the funds to help it reach its aim of raising €110 million to invest in over 20 early-stage businesses in Sub-Saharan Africa.
Financial inclusion (financial technology and insurance technology), logistics and retail system for mobile and online users, pay-as-you-go, healthcare innovations, and off-grid energy solutions are among the areas where the Innovation Fund concentrates.
The Innovation Fund has lately expanded its focus to include start-ups that are profiting on the emerging digital opportunities presented by the Covid-19 epidemic, or that have a strong potential to contribute in the coronavirus fight. The Mauritius-based Fund is co-sponsored by AfricInvest Capital Partners and Cathay Innovation SAS.
“The Bank’s clearance signals another key step forward in the integration of the Boost Africa Program and its partnership with the EU, OACPS, and the European Investment Bank,” said AfDB Director for Financial Sector Development Stefan Nalletamby.
“It illustrates the importance given to Africa’s tech-enabled rising entrepreneurs, as well as the significant role played by AfricInvest and Cathay Innovation in aiding this important business segment in attaining Africa’s growth, reform, and integration aspirations.”
Over 40% of the initiatives in its current pipeline span multiple African regions. West Africa accounts for a third of the start-ups in which it invests. One-quarter of all shareholder start-ups are in the healthcare industry.
AfricaGrow of Germany’s KfW/Allianz GI, Swiss impact investor Obviam as well as France’s public investment bank BPI and development financing organization Proparco, as well as are among the other investors.
Techbuild’s Take
The Organization of African Caribbean and Pacific States (OACPS), The African Development Bank, the European Union, and the European Investment Bank (EIB) collaborate to support investment funds that focus on early-stage innovative businesses in Sub-Saharan Africa.
The African Creation Bank’s financing supports the program’s goals of increasing innovation and entrepreneurship across Africa, establishing modern and top-quality job opportunities for young Africans, and promoting the growth of an efficient entrepreneurial environment.
The assistance provided by the Bank is expected to speed the creation of a new era of accomplished African entrepreneurs who would serve as role models for relatively young innovators.
It will also assist young and female-led start-ups, as well as extend access to financial and “real sector” goods and services, using appropriate technology and innovation.
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