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Proparco is confirming its support for microenterprises and SMEs through a USD 10m equity investment in the Novastar fund, a pioneer in East Africa in seed capital and venture capital investment in African start-ups and small businesses with strong economic and social impacts.
Client presentation

Novastar is a manager based in Kenya and a pioneer in East Africa in seed capital and venture capital investment in African start-ups and small businesses with strong economic and social impacts. The manager has built its investment thesis on supporting promoters that have developed operational models targeting employment for people excluded from the formal labor market and the provision of essential goods/services that are accessible to people on very low incomes.  To this end, in March 2014, the founders of Novastar raised the first USD 80m Novastar I fund dedicated to East Africa (Kenya, Ethiopia and Uganda).

Project description

The Novastar II successor fund follows the same investment thesis as the I fund, i.e. to catalyze seed capital and venture capital investments in start-ups in Africa and demonstrate that these profitable investments can generate large-scale development impacts for low-income populations. The II fund is different from the I fund in that it is extending the area of operation to English-speaking West Africa (Nigeria and Ghana) and extending the segment of beneficiaries to people on low incomes (incomes ranging between 2 and 6 dollars a day), in addition to “bottom of the pyramid” populations. 

Project impact

The Novastar II fund will promote the development of formal employment for local communities, as well as improved access to consumer goods and social and financial services. Novastar estimates that the activity of the portfolio companies will benefit 2.2 million people on low incomes and create or support 3,600 jobs by 2021. 

16/09/2019
Date of signature of the project
Multi-country Global Kenya
Location
Financing tool
8 778 000 Euros
Amount of funding
USD 10m equity investment
Financing details
Novastar ventures capital fund 2
Client
CES