Partech closes its second Africa fund at $300M+ to take a position from seed to Sequence C

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 measurement, 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 traders 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 diminished enterprise 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.

The affect was felt throughout all funding levels, with seed stage offers lowering by 33% and development stage offers by 39%, in line with Partech’s findings. Whereas Partech Africa, recognized to guide rounds, can not single-handedly reverse this development, its give attention to seed to Sequence C rounds might supply some stability and help for startups navigating these difficult occasions.  

Partech Africa needs to help founders at numerous levels of their journey, from early to later rounds leveraging its place within the ecosystem, the agency’s normal companions communicated. “The capacity to anchor rounds at all stages from seed to early growth, is more critical than ever,” Cyril Collon mentioned in an announcement.

In the meantime, in an electronic mail to TechCrunch, Tidjane Deme says the VC agency’s increasing crew will allow it to successfully deploy capital and supply help to portfolio corporations throughout these levels. With workplaces in Dakar, Nairobi, and Dubai, Partech Africa has not too long ago established a presence in Lagos, the place it’s actively hiring to interact carefully with startups within the area, underscoring the town’s significance as a 3rd of the agency’s portfolio corporations are based mostly there. Nonetheless, he clarified that the agency will deploy nearly all 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 reminiscent of fintech, agritech, well being tech, retail, FMCG, and company banking, that are essential for Africa’s employment and financial exercise. Notable investments embrace 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 agency’s deployment technique. “We keep supporting Fund 1 companies through their journey with capital and in many other ways.”

Extra of the fund’s technique was lined throughout its first close final February. 

Partech Africa’s investor base displays a various vary of profiles. Throughout its first shut, improvement finance establishments, industrial traders, African fund-of-funds, and household workplaces had been a few of its restricted companions. For its second shut, it attracted participation from U.S. and Center Japanese pension funds, sovereign funds, the Dubai Future District Fund (DFDF), and the African Reinsurance Company (Africa Re).

“We are grateful for the support and commitment of our investors: almost all Fund I investors reinvested, and some more than doubled their commitment,” remarked Collon. “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.”

Partech’s African fund is amongst several notable funds which have emerged on the continent previously yr, regardless of challenges for fund managers in elevating capital as restricted companions scrutinize technique and monitor report. Different large-sized funds embrace Norrsken22, Al Mada, and Novastar’s Africa Individuals + Planet. Moreover, corporations like Enza Capital, Equator, Knife Capital, and E3 Low Carbon Economic system Fund for Africa (E3LCEF) have additionally closed sizable funds, reflecting continued investor curiosity in Africa’s development potential.