Multinational: African Development Bank allocates 10 million euros in equity investment to boost technologies in the wake of Covid-19
The Board of Directors of the African Development Bank (www.AfDB.org) has approved an equity investment of €9.8 million to support venture capital investments in African start-ups, from l initiation to the growth phase.
Of the equity investment, 7 million euros will come from the African Development Bank’s own resources; the additional €2.8 million represents funds provided by the European Union (EU) through a partnership with the Organization of African, Caribbean and Pacific States (OACPS).
The investment will help Cathay-AfricInvest Innovation Fund achieve its goal of raising €110 million to invest in more than 20 early-stage companies in sub-Saharan Africa. The Innovation Fund focuses on financial inclusion (fintech and insurance tech), retail and logistics platforms targeting online and mobile consumers, health technologies and off-grid energy technologies. paid network.
More recently, the Innovation Fund has widened its scope to include start-ups that are exploiting new digital opportunities created as a result of the Covid-19 pandemic, or that have strong potential to help combat the coronavirus. The Mauritius-based fund is jointly sponsored by AfricInvest Capital Partners and Cathay Innovation SAS.
Stefan Nalletamby, Director of Financial Sector Development at the African Development Bank, said: “The Bank’s approval is another milestone in the implementation of the Boost Africa program and its partnership with the EU, the OACPS and the European Investment Bank. This signals the importance given to high-growth technology-based entrepreneurs on the continent and the key role of AfricInvest and Cathay Innovation in supporting this key business segment in Africa to achieve growth, transformation and integration of Africa.
In its current pipeline, more than 40% of projects cover more than one African region. About another third of the start-ups it invests in are in West Africa. A quarter of the beneficiary start-ups belong to the health sector.
Other investors include Germany’s KfW/Allianz GI’s AfricaGrow, public investment bank BPI and development finance institution Proparco, both French, and Swiss impact investor Obviam.
The Bank’s investment should accelerate the creation of a new class of successful African entrepreneurs who will serve as role models for young innovators. It will also support youth and women-led start-ups and improve access and inclusion to financial and “real sector” services and goods through appropriate technology and innovation.
Although venture capitalists invested $2 billion in African technology in 2019, a 73% increase over the previous year, funding from this source for innovative start-ups remains very low in Africa. Furthermore, very few venture capital funds focused on early-stage tech start-ups have successfully closed seed rounds.
The African Development Bank’s investment aligns with the objectives of the Boost Africa program to strengthen entrepreneurship and innovation in Africa, create new quality jobs for young Africans and contribute to the development of an effective entrepreneurial ecosystem in Africa.
Boost Africa, a collaboration between the African Development Bank, the European Union, the Organization of African, Caribbean and Pacific States (OACPS) and the European Investment Bank (EIB), provides financial support to investment funds that target innovative start-ups in the sub-regions. – Saharan Africa.
Distributed by APO Group for the African Development Bank (AfDB) Group.
Communication and External Relations Department
African development bank
E-mail: [email protected]
About the African Development Bank Group:
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). Present in 41 African countries with an external office in Japan, the AfDB contributes to the economic development and social progress of its 54 regional member states.
For more information: www.AfDB.org
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