The Board of Directors of the African Development Bank (AfDB) has approved a capital investment of $10.5 million in a venture capital fund to support innovative African businesses with strong growth potential.
Out of the capital investment, AfDB is to contribute $7 million from its ordinary resources and $3.5 million from the European Union Boost Africa programme.
Specifically, the funding is designed to empower Seedstars Africa Ventures (SAV), which focuses on early-stage investments in high-growth companies operating across Sub-Saharan Africa (SSA) to raise additional capital, expand its operations in the continent and attract further investment.
According to the development finance institution, the fund, which aligns with its Boost Africa’s goals, seeks to invest in innovative startups with robust growth and positive social impacts.
The latest investment strategy reinforces the bank’s approach, connecting entrepreneurship, investment, economic growth, and poverty reduction as well as its High 5 priorities by backing startups in key sectors such as agriculture, health, industrialization, and off-grid energy.
The fund also focuses on high-potential businesses striving to finding solutions to market challenges and generating income, with a primary focus on sub-Saharan Africa.
The Seedstars Africa Ventures (SAV) as a $ 75 million venture capital fund, targets startups addressing market constraints during their initiation and launch phases. Initial investments hover around €250,000, with subsequent capital injections of €5 million to support further growth.
The fund prioritizes financial inclusion, technologies aiding businesses (fintech and insurtech), retail sales and logistics platforms targeting online and mobile consumers, health-related technologies, prepaid off-grid energy, and the broader adoption of technology in businesses, especially in the food-processing industry and value chains.
It is projected that if well utilized by beneficiaries, the SAV will create at least 9,000 full-time jobs, with half of them being for women, contributing significantly to the economies in the continent.
