Venture capital activity in Africa has grown over time. African companies have raised over $5 billion this year, or $6.5 billion when debt financing is included, compared to the $1.16 billion reported in 2018. This demonstrates how far the tech ecosystem has come, and Partech’s new fund corresponds to that growth
Partech’s first African fund invested in 17 startups at Series A and B stages across nine countries that operate in 27. According to Deme, that fund’s strategy was to back particular startups going after deep economic sectors that are usually highly fragmented and informal in Africa “with many inefficiencies where bringing a tech platform with robust operations can build something that creates a lot of value.”
TradeDepot, Wave, Yoco, Reliance and Nomba are a few startups that underscore this strategy. They cut across fintech, retail and FMCG, agency banking, and health tech, sectors responsible for most of Africa’s employment and economic activity. These startups are capitalizing on increasing access to digital infrastructure and rising consumer and business demand. According to Partech Africa, its portfolio has brought value to over a million merchants and 20 million end users across the continent.
“We do invest in late-seed. So when we say $1 million, it’s also because we can go earlier. Also, we will keep working on ensuring that we can preempt talented teams very early on and not necessarily wait till they are fundraising,” Collon said from Partech’s Dubai office. “Connecting with the market and entrepreneurs as we have done with fund 1 is essential for fund II’s success.”
From a VC point of view, Partech says its startups have attracted more than 10% of the investment that has flowed into the continent between 2021 and 2022. Impressively, the venture capital firm also boasts a high-profile exit and unicorn among its ranks: WorldRemit subsidiary Sendwave and Stripe-backed Wave (a spinoff from Sendwave).
Partech, a global multi-fund VC firm, has achieved the first closing of Partech Africa II for €245 million (approximately $263 million), making it the largest Africa-focused fund to date.
The company, which focuses on early-stage and growth-stage start-ups across the continent, has raised around €230 million (approximately US$250 million) for its second Africa fund, raising 150 million It would have achieved its first closing in euros.
Tidjane Deme and Cyrill Colon of General Partners. However, overwhelming interest from LPs meant that Partech Africa II exceeded the initial targets set for the fund as a whole at its first closing. Additionally, the Africa Fund is now aiming for a final closing of no more than €280 million (about $300 million), Mr Deme said in the tender.
Partech Africa II is one of three funds the global venture capital firm has raised in the last two years. This includes his $750 million growth fund and his $100 million seed fund covering multiple markets and industries around the world. It is also a follow-up to Partech Africa I, the first fund announced in 2018 and closing at $143 million.
The company intends to use the funds raised from fund II as capital for more than 20 startups. It is one of the major growth-stage funds with an emphasis on Africa, along with TLcom Capital, Norrsken22, Algebra Ventures, and Novastar Ventures. The team, which has offices in Dakar, Nairobi, and Dubai, is growing and one of these new places in Lagos.
Additionally, its operations are strengthened by Partech’s strong global platform, which covers vital tasks including business development and portfolio assistance, founders community, ESG, finance, compliance, and legal.