SBI Holdings, a Japanese financial services behemoth and one of the top venture capital firms in the East Asian country, has committed $40 million to anchor future funds of pan-African VC firm Novastar Ventures.
Following the agreement, SBI Holdings will acquire a minority ownership in Novastar. A non-executive seat on its board as Riki Yamauchi, SBI’s Africa adviser, joins Novastar’s investment team. In order to guarantee that the partnership objectives are realized.
As the East Asian country’s interest in Africa develops, SBI Holdings has committed to gather other Japanese institutional investors to match its investment in Novastar.
SBI Holdings Inc.’s Yoshitaka Kitao stated of the collaboration, “With its rapid expansion, young and proficient in technology population, abundant natural assets. And accelerating urbanization, Africa is poised for global leadership in sustainable development.”
“We recognize Novastar as the market leader in African venture capital. And look forward to establishing a new, trusted link between Japan and Africa for financial and strategic investment. Also looking for knowledge transfer, and innovation learnings. This collaboration will leverage Africa’s megatrends for the mutual benefit of Japanese investors and African businesses,” said Kitao, the representative director, chairman, president, and CEO of SBI Holdings.
The new contribution comes as Novastar is establishing its third pool, The Africa People + Planet Fund. With a goal of raising more than $200 million to invest in agriculture and climate solutions.
It will also support companies that provide services that enable market access. And resilience in the face of climate change for the various clean-techs that assist decarbonize the continent’s growth. In addition, climate-tech that “protects biodiversity, improves soil health, and captures carbon.”
Novastar sees value in a partnership with SBI Holdings as it raises its latest fund to back agriculture and climate startups, and plans to co-invest in future deals.
“Based on SBI, we see a possibility to harness Africa’s economic growth path to create planet-positive, inclusive businesses that leapfrog damaging practices and set us on a path to a more 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.
Previous funds include the $108 million Africa Fund II, which expanded Novastar’s geographical reach to encompass West Africa. The $80 million East Africa Fund co-invested in 15 regional firms.
The investors include TradeDepot, an e-commerce scaleup, Turaco, an insurtech, Moniepoint (previously TeamApt), a fintech. Furthermore, mPharma, a health tech, MoKo, a furniture company, and iProcure, an agtech are among its investors.
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