Partech has closed its second Africa fund, Partech Africa II, at €280 million ($300 million+), only one yr after reaching its first shut.
At that dimension, Partech Africa, which initially focused €230 million earlier than its fundraising efforts began, solidifies its place as the biggest fund devoted to African startups.
Amidst a backdrop of world VCs and institutional buyers pulling again from Africa, Partech Africa’s latest fund closure is important. The continent witnessed a notable decline in investor exercise, with a 50% lower in 2023 in comparison with the earlier yr, as highlighted in a Partech report. This retreat, influenced by international financial shifts and native challenges, translated into decreased enterprise capital inflows for African startups, totaling between $2.9 billion and $4.1 billion final yr, down from $4.6 billion to $6.5 billion in 2022.
The influence was felt throughout all funding phases, with seed stage offers reducing by 33% and progress stage offers by 39%, based on Partech’s findings. Whereas Partech Africa, identified to steer rounds, can’t single-handedly reverse this development, its give attention to seed to Sequence C rounds might provide some stability and assist for startups navigating these difficult occasions.
Partech Africa needs to assist founders at numerous phases of their journey, from early to later rounds leveraging its place within the ecosystem, the agency’s normal companions communicated. “The capability to anchor rounds in any respect phases from seed to early progress, is extra crucial than ever,” Cyril Collon mentioned in a press release.
In the meantime, in an e-mail to TechCrunch, Tidjane Deme says the VC agency’s increasing crew will allow it to successfully deploy capital and provide help to portfolio corporations throughout these phases. With workplaces in Dakar, Nairobi, and Dubai, Partech Africa has lately established a presence in Lagos, the place it’s actively hiring to interact intently with startups within the area, underscoring town’s significance as a 3rd of the agency’s portfolio corporations are based mostly there. Nevertheless, he clarified that the agency will deploy the vast majority of its second fund between Sequence A and B rounds.
Among the many investments from its second fund is Revio, a South African cost orchestration platform, the place Partech Africa co-led the seed spherical with international fintech fund QED. Moreover, the agency has made undisclosed investments in an Egyptian proptech and a Senegalese e-commerce startup. Partech Africa intends to again over 20 corporations, with preliminary investments starting from $1 million to $15 million, it disclosed.
The Dakar-based enterprise capital agency, which has backed 17 startups in its first fund, prioritizes sectors corresponding to fintech, agritech, well being tech, retail, FMCG, and company banking, that are essential for Africa’s employment and financial exercise. Notable investments embody Wave, TradeDepot, Yoco, and Reliance.
“Corporations from the primary fund can profit from follow-on capital from the primary fund however not from the second,” Deme commented on the agency’s deployment technique. “We maintain supporting Fund 1 corporations by their journey with capital and in lots of different methods.”
Extra of the fund’s technique was lined throughout its first shut final February.
Partech Africa’s investor base displays a various vary of profiles. Throughout its first shut, growth finance establishments, business buyers, African fund-of-funds, and household workplaces have been a few of its restricted companions. For its second shut, it attracted participation from U.S. and Center Jap pension funds, sovereign funds, the Dubai Future District Fund (DFDF), and the African Reinsurance Company (Africa Re).
“We’re grateful for the assist and dedication of our buyers: virtually all Fund I buyers reinvested, and a few greater than doubled their dedication,” remarked Collon. “We’re additionally honored to get the assist from a brand new set of strategic buyers from the US, the Center East and Africa, and for a few of whom, this marks their first dedication in African tech.”
Partech’s African fund is amongst a number of notable funds which have emerged on the continent up to now yr, regardless of challenges for fund managers in elevating capital as restricted companions scrutinize technique and observe report. Different large-sized funds embody Norrsken22, Al Mada, and Novastar’s Africa Folks + Planet. Moreover, corporations like Enza Capital, Equator, Knife Capital, and E3 Low Carbon Financial system Fund for Africa (E3LCEF) have additionally closed sizable funds, reflecting continued investor curiosity in Africa’s progress potential.
