AFRICA – kfW Development Bank, a German state-owned investment and development bank, is set invest up to €45 million (US$44.7 million) in the Partech Africa fund II, which will finance African startups and small and medium-sized enterprises (SMEs) active in the digital sectors.
“KfW is pleased to serve as the lead investor in the Partech Africa Fund II. We share the aim of assisting innovative entrepreneurs who are driving digital innovation in Africa while also stimulating the growth of the African venture capital ecosystem,” said Stephanie Lindemann-Kohrs, KfW’s Head of Equity Finance.
The bank will join a diverse group of international financial institutions and investors that have already signalled their intention to participate in the second Partech Africa venture capital fund.
The International Finance Corporation (IFC), for example, proposes to spend US$25 million in it, as does the Dutch Development Finance Bank.
The company hopes to improve its strategy of discovering and promoting technical innovation, as well as the next generation of African market leaders, with this second fund.
The vehicle will appeal to technological firms in all stages of development, from seed to growth, with start-up financing ranging from US$1 to US$15 million. It will follow the same investment approach as Partech Africa I, but will raise twice as much money.
Partech Africa I was launched in early 2018 and concluded a year later, with total commitments of roughly €125 million (US$124.38m).
It has invested in 16 companies based in nine countries. Meanwhile, the new fund will capitalise on the prospects given by the fast increasing African tech industry in 2021, with a total of US$5.2 billion raised by 640 start-ups in 681 rounds, according to the annual report of 2021 from Partech Africa on venture capital investment for African startups.
This comes days after IFC announced plans to make an equity investment of up to €25 million (US$26.43) into the Partech Africa Fund II. The IFC said in the disclosures that it’s eyeing a stake not exceeding 20%.
The agency said it will commit a further €15 million (US$15.9 million) for future co-investment opportunities together with the fund.
The PAF II will invest in “seed to Series D rounds, and follow-on rounds in top portfolio companies,” according to records by the IFC. The investment is awaiting approval.
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