The U.S International Development Finance Corporation (DFC) has announced a USD 25 million equity investment in the Africa People + Planet Fund, a new investment vehicle launched by Pan-African venture capital firm Novastar Ventures.
The Africa People + Planet Fund will support startups focused on climate solutions and agriculture, particularly those that enhance community resilience through the provision of financial and supply chain services. Novastar Ventures, based in Nairobi and Lagos, is aiming to raise over USD 200 million for the fund, which will be its third pool after the USD 108 million Africa Fund II and the USD 80 million East Africa Fund.
Novastar’s investment strategy
Novastar Ventures has previously invested in tech-enabled startups that serve the mass market in various sectors, including agriculture, education, and off-grid renewable energy. The new fund will support marketplaces, cleantechs, and initiatives that enable access to markets and build community resilience in the face of climate change. According to Andrew Carruthers, Novastar’s co-founder and managing partner, “We see opportunities in all three categories, driven by the clear megatrends such as immense population growth, rapid urbanization, and the vast amount of arable land on the continent.”
The Africa People + Planet Fund
The Africa People + Planet Fund will support cleantechs that address clean utilities, clean construction technologies, electric mobility, smart logistics, the circular economy, and alternative materials that help to decarbonize growth in Africa. The fund will also back climate techs that deploy regenerative forestry, agriculture, and aquaculture, biofuels, and biochar to protect biodiversity, improve soil health, and capture carbon. Novastar Ventures is committing additional funding to support the growth of cleantechs in Africa, which were the second most funded startups in the region last year, after fintechs.
Growing climate solutions
DFC’s equity investment in Novastar’s fund is expected to strengthen the fund’s position in the African market and catalyze the growth of climate solutions and agriculture startups. Novastar’s investment strategy, which focuses on sustainable, planet-positive, mass-market business models, will contribute to Africa’s transition to a low-carbon economy while addressing challenges such as food security, access to finance, and community resilience. According to Carruthers, the new fund will build on Novastar’s experience and use the same tools and strategies to support sustainable, planet-positive business models across Africa that the rest of the world can learn from.
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