Partech Africa II, the second Africa-focused fund by Partech, has concluded its fundraising at €280 million ($300 million+), just a year after its initial close.
This significant achievement cements Partech Africa’s position as the largest fund dedicated to African startups, surpassing its original target of €230 million.
Amidst a backdrop of global VCs and institutional investors scaling back their presence in Africa, the closure of Partech Africa II holds considerable weight. A Partech report highlights a notable decline in investor activity on the continent, with a 50% decrease in 2023 compared to the previous year. This downturn, influenced by global economic shifts and local challenges, resulted in reduced venture capital inflows for African startups, ranging between $2.9 billion and $4.1 billion last year, down from $4.6 billion to $6.5 billion in 2022.
The impact of this retreat was felt across all investment stages, with seed stage deals decreasing by 33% and growth stage deals by 39%, according to Partech’s findings. While Partech Africa cannot single-handedly reverse this trend, its focus on seed to Series C rounds may provide some stability and support for startups navigating these challenging times.
Partech Africa aims to support founders across various stages of their journey, leveraging its position in the ecosystem. Cyril Collon, one of the firm’s general partners, emphasized the importance of anchoring rounds at all stages from seed to early growth.
Tidjane Deme highlighted the VC firm’s expanding team, enabling effective capital deployment and assistance to portfolio companies across different stages. With offices in Dakar, Nairobi, and Dubai, Partech Africa has recently established a presence in Lagos, underscoring the city’s significance as a third of the firm’s portfolio companies are based there. However, Deme clarified that the majority of the second fund would be deployed between Series A and B rounds.
Among the investments from its second fund is Revio, a South African payment orchestration platform, where Partech Africa co-led the seed round with global fintech fund QED. Additionally, the firm has made undisclosed investments in an Egyptian proptech and a Senegalese e-commerce startup. Partech Africa intends to back over 20 companies, with initial investments ranging from $1 million to $15 million.
Partech Africa prioritizes sectors such as fintech, agritech, health tech, retail, FMCG, and agency banking, crucial for Africa’s employment and economic activity. Notable investments include Wave, TradeDepot, Yoco, and Reliance.
Partech Africa’s investor base reflects a diverse range of profiles, including development finance institutions, commercial investors, African fund-of-funds, family offices, U.S. and Middle Eastern pension funds, sovereign funds, the Dubai Future District Fund (DFDF), and the African Reinsurance Corporation (Africa Re).
Collon expressed gratitude for the support and commitment of investors, with almost all Fund I investors reinvesting, and some increasing their commitment. The fund also attracted new strategic investors from the US, the Middle East, and Africa, marking their first commitment in African tech.
Partech’s African fund joins several other notable funds that have emerged on the continent in the past year, reflecting continued investor interest in Africa’s growth potential despite challenges in raising capital.
