Pan-African VC firm Novastar Ventures has secured US$80 million in capital from Japan’s SBI Holdings.
With offices in Nairobi and Lagos, Novastar is one of the largest platforms dedicated to financing early and growth stage businesses in Africa. The firm backs startups that address proven demand for basic goods and services with innovative business models.
The firm has previously raised two funds totalling over US$200 million, and it has now banked US$80 million from SBI Holdings, one of the largest VC groups in Japan. The strategic partnership takes the form of a US$40 million multi-fund investment to anchor Novastar’s upcoming funds. SBI Holdings will also help to mobilise matching commitments from Japanese institutional investors to Novastar’s funds.
SBI Holdings will invest to take a minority stake in Novastar, providing growth capital to develop the Novastar platform. Novastar and its investment process will continue to be managed and controlled by its four partners, with SBI Holdings taking one non-executive seat on Novastar’s management board. Riki Yamauchi will join Novastar’s investment team to lead delivery of the partnership objectives.
“When Novastar launched nearly 10 years ago, there was no VC asset class in Africa. Since then, venture funding to startups on the continent has increased more than 20-fold. While that growth is exciting, African VC is just getting started. Together with SBI, we see an opportunity to harness Africa’s development path to planet-positive, inclusive business models that leapfrog the polluting practices of the past and set us on track towards a sustainable and just future. Realising this opportunity requires the capital, technology and long-term mindset of corporate Japan and other mature economies,” said Steve Beck, co-founder and managing partner at Novastar.
“With its rapid growth, young and tech-savvy population, abundant natural assets and increasing urbanisation, Africa is poised for global leadership on sustainable development. We recognise Novastar as the leader in African VC and look forward to building a new, trusted bridge between Japan and Africa for financial and strategic investment, knowledge transfer and innovation learnings. This partnership will leverage Africa’s megatrends for the mutual benefit of Japanese investors and African businesses,” said Yoshitaka Kitao, representative director, chairman, president and CEO of SBI Holdings.