SEEDSTARS AFRICA VENTURES 1

Promoter – Financial Intermediary

SPECIAL PURPOSE ENTITY(IES)/FUND

Location

• Regional - Africa

Description

The operation consists of an equity participation of up to USD 20m into Seedstars Africa Ventures, a closed-ended venture capital fund focusing on Sub-Saharan Africa (primarily West and East Africa) and to a lesser extent on North Africa. The fund focuses on investments into high-growth small and medium sized enterprises (SMEs) leveraging digital technologies to deliver services across sectors.

Additionality and Impact

Through this operation, the EIB will be able to support a first-time team launching its first fund targeting investments in SMEs in Africa, with a primary focus on Sub-Saharan Africa. By enhancing access to much needed risk capital to support start-ups and growth SMEs the project is expected to promote economic growth and private sector development, stimulate job creation, encourage local young entrepreneurs supporting solutions with high level of scalability and reduce poverty across targeted African economies. Access to finance - in particular equity finance - and managerial advice are among the most prevalent barriers for the growth of small and mid-sized companies. The provision of growth capital and managerial support through private equity funds has proven an effective strategy to overcome this market failure.

The project will not have relevant negative environmental and social impacts. On contrary, some investments may result in positive environmental and social impacts.

With the EIB commitment, the Fund's terms are expected to be negotiated in line with market practice standards. Additionally, the EIB's involvement is anticipated to support the fundraising and catalyse other investors in a challenging fund raising environment that has been exacerbated by the impact of the Covid-19 pandemic and the conflict in Ukraine.

Objectives

The aim is to support the creation of jobs, digitalisation and the private sector development, by increasing access to risk capital to local high-growth SMEs. The fund will invest into a diversified portfolio of companies, supporting the value creation of the underlying investees through a hands-on management approach, as well as enhancing the ESG standards.

Sector(s)

• Services - Financial and insurance activities

Proposed EIB finance (Approximate amount)

USD 20 million (EUR 18 million)

Total cost (Approximate amount)

USD 80 million (EUR 73 million)

Environmental aspects

The Fund will operate in line with the EIB's environmental and social standards.

Procurement

N/A

Status

Signed - 22/12/2023