Partek has closed its second Africa fund, Partek Africa II, for €280 million (over $300 million), just one year after reaching its first close.
At this scale, Partek Africa, which was originally targeted, 230 million euros Even before we begin our fundraising efforts, we have solidified our position as the largest fund dedicated to African startups.
Partek Africa's recent fund closure is significant in the context of global VCs and institutional investors withdrawing from Africa. As highlighted in the Partech report, the continent saw a notable decline in investor activity, with a 50% year-on-year decline in 2023. This setback, influenced by changes in the global economy and regional challenges, has led to a decline in venture capital inflows to African startups, totaling $2.9 billion to $4.1 billion last year and expected to reach $4.6 billion in 2022. It decreased from $6.5 billion to $6.5 billion.
The impact was felt across all investment stages, with seed-stage deals down 33% and growth-stage deals down 39%, according to Partech's findings. Partech Africa, which is known for leading rounds, cannot reverse this trend on its own, but its focus on seed to Series C rounds will provide some stability and support to startups through this difficult period. may be able to provide it.
Partek Africa wants to leverage its position within the ecosystem to support founders at various stages of their journey, from early to late stages, the company's general partner informed. “The ability to anchor rounds at every stage from seed to early growth is more important than ever,” Cyril Colon said in a statement.
Meanwhile, Tijan Deme said in an email to TechCrunch that the VC firm's expanded team will allow it to deploy capital effectively and provide support to portfolio companies throughout these stages. Partek Africa, which has offices in Dakar, Nairobi and Dubai, recently established a presence in Lagos and is actively recruiting talent to work closely with start-ups in the region, with the company's portfolio companies One third are based in Lagos, underscoring the city's importance. However, he revealed that the company will deploy the majority of its second fund between Series A and B rounds.
Among the investments from the second fund is Revio, a South African payments orchestration platform, in which Partec Africa co-led a seed round with global fintech fund QED. Additionally, the company has made undisclosed investments in Egyptian proptech and Senegalese e-commerce startups. Partek Africa plans to support over 20 companies, with initial investments ranging from $1 million to $15 million.
The Dakar-based venture capital firm is backing 17 startups in its first fund, including fintech, agritech, healthtech, retail, FMCG, and other businesses critical to Africa's jobs and economic activity. It is prioritizing sectors such as agent banking. Some notable investments include Wave, TradeDepot, Yoco, and Reliance.
“Companies from the first fund can benefit from continuing capital from the first fund, but not from the second fund,” Deme commented on the company's deployment strategy. . “We continue to support Fund 1 companies with financing and many other ways.”
Details of the fund's strategy were covered during its first close in February last year.
Partec Africa's investor base reflects a variety of profiles. At the time of the initial closure, development finance institutions, commercial investors, African funds of funds, and family offices were some of the limited partners. The second deadline attracted participation from US and Middle Eastern pension funds, sovereign wealth funds, Dubai Future District Fund (DFDF) and African Reinsurance Corporation (Africa Re).
“We are grateful for the support and commitment of our investors. Nearly all Fund I investors have reinvested, and some have more than doubled their commitments,” Collon said. I did. “We are also proud to have the support of new strategic investors from the United States, the Middle East and Africa, for some of whom this will be their first foray into African technology.”
Partek's Africa Funds is a list of some notable funds that have sprung up on the continent over the past year, despite fund managers facing challenges in raising capital as limited partners scrutinize their strategies and performance. There is one. Other large funds include Norsken22, Al Mada and Novastar's Africa People + Planet. Additionally, reflecting continued investor interest in Africa's growth potential, companies such as Enza Capital, Equator, Knife Capital and E3 Africa Low Carbon Economy Fund (E3LCEF) have also launched significant funds. is closed.