On 18 January 2018, a new venture capital fund, Partech Africa, was launched to invest in early-stage Afrikan startups. Created by global VC firm, Partech Ventures, the Partech Africa fund will be looking to invest a minimum of approximately $600,000 and up to about $6 million per initial ticket.
Often on the continent, budding entrepreneurs complain about the lack of funding to expand and grow their businesses. Apart from lack of funding, the glaring realization that there are few Afrikan based and founded early-stage VC funds is also apparent.
This is where the Partech Africa fund believes it can come in to fill the void, fund and help entrepreneurs scale, and still make some money for themselves in the process.
Tidjane Dème, General Partner at Partech Africa, and Cyril Collon, General Partner at Partech Africa.
“Partech [Ventures] has been seeing a steady growth in Afrikan tech startups investment since 2012, it went from $40M in 2012 to $367M in 2016. Partech also saw increasing and attractive requests for funding from Afrikan entrepreneurs," said Tidjane Dème, General Partner at Partech Africa, to iAfrikan on what brought the idea of the fund about.
Dème explained that along with Cyril Collon (General Partner at Partech Africa), both whose careers in tech on the continent span more than 20 years, they felt it was the right time for a fund dedicated to Afrika.
"Doing it with Partech was natural. We knew very well some of the partners of Partech and we shared a similar view of a fund that would be tailored to Afrikan startups needs. For instance, we are very excited about leveraging Partech’s ability to expose startups to global corporate partners,” added Dème.
Apart from the money that they are looking to invest in Afrikan technology startups, it is the relationship with Partech Ventures, as mentioned by Dème, that is also going to likely play a critical role. With corporate partners across the world, Partech Ventures could help the startups funded through Partech Africa with unique access to market opportunities. Added to the corporate partners is that Partech will also dedicate a business development team that will expose the Afrikan startups, investees of Partech Africa, to European and USA markets, enable commercial contracts and long-term strategic partnerships.
The money does count though.
"So far, we have secured €57M (approximately $70 million) coming from different types of investors. First, we are pleased to have the support major financial institutions led by the IFC, member of the World Bank Group, and including the European Investment Bank and Averroès Finance III. Second, we have on board major corporate investors with a strategic interest in the region such as Orange, Edenred and JCDecaux Holdings,” said Collon.
With such a war chest, it is no surprise that Partech Africa is looking to invest between €500,000 (about $600,000) and €5 million (approximately $6 million) as initial ticket in a Series A or B funding round per startup. The funds, as Dème and Collon highlight, will be aimed at assisting the investees to scale across multiple markets.
And what are they looking for in a potential investee?
The answer is straightforward although a bit general: talented entrepreneurs that are using technology to address fundamental problems and have a huge impact.
"We want to help them scale into regional champions."
Partech Africa so far describes itself as a generalist technology fund which invests in early-stage Afrikan startups.
"Today we are seeing dynamic activity in the areas of Financial Inclusion (Fintech, InsurTech, new distribution models); online and mobile consumer services (commerce, entertainment, education, digital services), as well as mobility, supply chain services and digitization of the informal economy."
When the Partech Africa fund made the news, it created a buzz in the Afrikan technology startups ecosystem. With the funds at hand to invest in early-stage Afrikan startups and the Partech platform providing support to investees it sounds like 2018 is off to a good start for those Afrikan startups which have traction and are looking for funding to scale and expand into new markets.
We are looking to fund Tech startups that address large emerging market opportunities and have their main activity in Afrika. We will invest between €0.5M and €5M as an initial ticket in a Series A or B and support these startups to scale across multiple markets.
Dème and Collon conclude by stating that they are particularly interested in the new data streams created by FinTech and the transformative power of technology for Afrika's informal sector.