Novastar Ventures Launches $72.5m Fund for Anglophone Startups, to Open Lagos Office Soon

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Novastar Ventures VC Firm Launches $72.5m Fund for Anglophone Startups, To Open Lagos Office Soon

Kenyan Venture Capitalist firm, Novastar Ventures has launched a new $72.5 million fund targeted at Anglophone Africa. Called Novastar II, the fund aims to invest in innovative businesses providing solutions to problems in few regions of Africa.

Novastar Ventures is a Nairobi-based venture firm which describes itself as a “venture catalyst”. The firm backs early and growth stage companies addressing basic problems with innovative solutions. It usually funds startup companies which directly or indirectly have social impact on low income households.

“Our vision is to see sub-Saharan Africa populated with a growing number of high-capacity entrepreneurs building innovative businesses that serve the common good,” says Steve Beck, Novastar’s Managing Partner. “We aim to demonstrate that commercial venture investing can generate both large-scale social benefits for the mass market and attractive financial returns for investors.”

The firm already has quite a number of investments through its existing Novastar I fund. With over $90 million in its coffers, Novastar I has invested in 15 startups largely in the East African region.

However, the new funding comes with a much wider target. The fund targets breakthrough startups in both East Africa and other English-speaking parts of Africa. Although the fund raised less than its expected $120 million target, it plans to invest “as little as $250,000” in unproven business models across its target countries.

Novastar Expands Into Nigeria

Importantly too, the firm says it will open a new office in Lagos, Nigeria, as it aims to tap into the country’s pool of resourceful entrepreneurs and innovators.

The firm aims to export its flexible long term capital framework and local knowledge to identify worthy startups in need of funding.

And the choice of Lagos is quite apt. With the startup ecosystem growing and entrenching itself deep into the economy, it represents plenty of opportunities for investors. Favourable government policies in this direction could lead to robust benefits for early entrants into the market.

Novastar aims to play a lead role early on and provide the “spark” for other Anglophone markets.


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