Partech closes its second Africa fund at $300M+ to invest from seed to Series C
“Amidst a backdrop of global VCs and institutional investors pulling back from Africa, Partech Africa’s recent fund closure is significant. The continent witnessed a notable decline in investor activity, with a 50% decrease in 2023 compared to the previous year.”
“This retreat, influenced by global economic shifts and local challenges, translated into reduced venture capital inflows for African startups, totaling between $2.9 billion and $4.1 billion last year, down from $4.6 billion to $6.5 billion in 2022.”
Partech has announced the successful closing of its second Africa fund, Partech Africa II, at €280 million ($300 million+), just one year after reaching its first close. This amount exceeds the original target of €230 million, solidifying Partech Africa’s position as the largest fund dedicated to African startups.
- At that size, Partech Africa is able to support founders at various stages of their journey, from early to later rounds, leveraging its position in the ecosystem.
- The firm’s general partners have emphasized the importance of anchoring rounds at all stages, from seed to early growth.
- According to Cyril Collon, one of the general partners, “The capacity to anchor rounds at all stages from seed to early growth, is more critical than ever.”
“We are also honored to get the support from a new set of strategic investors from the US, the Middle East and Africa, and for some of whom, this marks their first commitment in African tech.” commented Collon.
Meanwhile, in an email to TechCrunch, Tidjane Deme stated that Partech Africa’s expanding team will enable it to effectively deploy capital and offer assistance to portfolio companies across various stages. The firm currently has offices in Dakar, Nairobi, and Dubai, and has recently established a presence in Lagos, where it is actively hiring to engage closely with startups in the region. It’s worth noting that a third of the firm’s portfolio companies are based in Lagos.
Partech Africa has already made investments from its second fund, including Revio, a South African payment orchestration platform where it co-led the seed round with global fintech fund QED. Additionally, the firm has made undisclosed investments in an Egyptian proptech and a Senegalese e-commerce startup. It aims to back over 20 companies, with initial investments ranging from $1 million to $15 million.
The Dakar-based venture capital firm, which has backed 17 startups in its first fund, prioritizes sectors such as fintech, agritech, health tech, retail, FMCG, and agency banking, which are crucial for Africa’s employment and economic activity. Notable investments include Wave, TradeDepot, Yoco, and Reliance.
“Companies from the first fund can benefit from follow-on capital from the first fund but not from the second one,” Deme commented on the firm’s deployment strategy. “We keep supporting Fund 1 companies through their journey with capital and in many other ways.”
During its first close, Partech Africa welcomed a diverse range of investors such as development finance institutions, commercial investors, African fund-of-funds, and family offices. For its second close, it attracted participation from U.S. and Middle Eastern pension funds, sovereign funds, the Dubai Future District Fund (DFDF), and the African Reinsurance Corporation (Africa Re).
These recent fund closures, including Norrsken22, Al Mada, and Novastar’s Africa People + Planet, as well as Enza Capital, Equator, Knife Capital, and E3 Low Carbon Economy Fund for Africa (E3LCEF), reflect continued investor interest in Africa’s potential for growth. Despite challenges for fund managers in raising capital, it is clear that there is a strong and growing appetite for investing in African startups.
