A $40 million multi-fund commitment has been made by SBI Holdings, a Japanese financial services conglomerate and one of the biggest venture capital firms in East Asia, to support the future funds of pan-African VC firm Novastar Ventures.
In order to make sure that the partnership’s goals are reached, Riki Yamauchi, SBI’s adviser in Africa, will join Novastar’s investment team and SBI Holdings will acquire a minority ownership in the latter company as well as a non-executive position on its board.
As the East Asian nation’s interest in Africa develops, SBI Holdings has promised to mobilize additional Japanese institutional investors to match its investment in Novastar.
“With its rapid growth, young and tech-savvy population, abundant natural assets, and increasing urbanization, Africa is poised for global leadership on sustainable development.” SBI Holdings Inc.’s Yoshitaka Kitao said in regards to the relationship.
“We recognize Novastar as the leader in African VC and look forward to building a new, trusted bridge between Japan and Africa for financial and strategic investment, knowledge transfer, and innovation learnings. This partnership will leverage Africa’s megatrends for the mutual benefit of Japanese investors and African businesses,” stated Kitao, who also holds the positions of chairman, CEO, and representative director for SBI Holdings.
The announcement of the additional commitment coincides with Novastar’s launch of The Africa People + Planet Fund, its third pool, with a goal of gathering over $200 million to be invested in the agricultural and climate solutions industries. For the numerous clean technologies that contribute to decarbonizing the growth projected for the continent, as well as climate technologies that “protect biodiversity, improve soil health and capture carbon,” Novastar will support entrepreneurs providing services that facilitate market access and resilience in the face of climate change.
As it raises its most recent fund to support companies in the fields of agriculture and climate change, Novastar sees value in partnering with SBI Holdings and intends to co-invest in more transactions.
“Together with SBI, we see an opportunity to harness Africa’s development path to planet-positive, inclusive business models that leapfrog the polluting practices of the past and set us on track towards a sustainable and just future. Realizing this opportunity requires the capital, technology, and long-term mindset of corporate Japan,” said Steve Beck, Novastar’s co-founder and managing partner.
The $108 million Africa Fund II was one of Novastar’s earlier funds. Through it, the company expanded to encompass West Africa. Its inaugural fund, The East Africa Fund, was a $80 million fund with a $12.5 million co-investment facility that invested in 15 firms in the region. Among its investors are the scale-up e-commerce company TradeDepot, the insurtech company Turaco, the finance company Moniepoint (previously TeamApt), the health tech company mPharma, the furniture firm MoKo, and the agtech company iProcure.