The European Union (EU) has shown its commitment to supporting innovation in Sub-Saharan Africa by investing in Seedstars African Ventures International, a Nairobi-based venture capital organisation that provides funding for innovative startups and high-growth companies within the region.
Recently, Seedstars received over Ksh4.8 billion in funding from the European Investment Bank (EIB), the world’s largest multailateral lender and a key partner of the EU in Africa. The funding was backed by Ksh3 billion (US$20 million) from the African Caribbean, Pacific Trust Fund and Ksh1.5 billion (US$10 million) from the Boost Africa programme.
Seedstars Africa Ventures I, which has its headquarters located in both Nairobi and Paris, collaborates with global entrepreneurship supporter Seedstars and multi-specialist investment platform LBO France. The firm aims to invest in 50 to 60 tech startups across Sub-Saharan Africa over the next four years, with a focus on fintech, healthtech, agritech, and edtech sectors.
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Seedstars praised the EIB for its recognition and support
While receiving the funding, Seedstars praised the EIB for its recognition of its efforts and pledged to continue the funding for African companies.
“The anchoring ticket provided by the European Investment Bank is a testament to our investment thesis and the work we do across Africa”, noted Seedstars. Hi
“It signals the relevance of our positioning as well as the effectiveness of our support to portfolio companies. This recognition will further help us onboard both African and foreign investors in the Fund to reach our target size,” Seedstars added while receiving the grant.
Some of the startups that have already received funding from Seedstars include OkHi, a Kenyan digital address system; FlexClub, a South African car subscription marketplace; and Schoolap, a Congolese online education platform.
Kenya leads Africa in tech startup funding, thanks to Seedstars and others
The funding received by Seedstars is part of the reason why Kenya has emerged as the top destination for tech startup funding in Africa, surpassing Nigeria and Egypt. The country secured Ksh124 billion (USD800 million) worth of start-up capital in 2023, according to a report by research outfit ‘Africa: The Big Deal’.
The President hailed the country’s tech startup ecosystem and attributed the success to his government’s efforts to create an enabling environment for tech startups.
“Proud that Kenya leads Africa in startup capital, securing an impressive $800 million (Ksh 124 billion) in 2023. Our strategic reforms have enhanced the business environment, positioning Kenya as the preferred choice for investors,” stated the Head of State.
The President also commended the role of Seedstars and other venture capital firms in supporting the growth of the tech sector in Kenya and Africa. He said that his government would continue to work with them to foster innovation and entrepreneurship in the continent.
Some of the difficulties African tech firms face
The market for African IT firms is not a simple one. It is a mosaic of many different countries, each with its own identity, language, and rules. They have to cope with the scarcity of money and talent for their tech projects, as most people have low incomes or no bank accounts. They also have to deal with the drawbacks of slow and costly internet, unreliable and hard-to-get investors, and dominant and influential rivals. They have to convince people to change their habits and try new things, when they are comfortable with the old ones. They have to take over the roles of charities or aid groups, who used to offer some of these services.