ImpactAlpha, October 26 – Nairobi-based venture capital firm Novastar reached a first close for its second fund, which will invest in early and growth stage enterprises in East and West Africa.
Asset management firm AXA Investment Managers backed the fund through its second impact fund of funds, AXA Impact Fund II. European development finance institutions CDC Group, European Investment Bank, Dutch Good Growth Fund and FMO also participated.
Novastar is looking to raise $120 million to provide African businesses addressing demand for basic goods and services, particularly for 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,” Novastar’s Steve Beck said. The hope is that its early capital will unlock follow on funding for African entrepreneurs.
Novastar raised and invested $80 million along with a $10 million co-investment facility for its first fund, which supported 15 companies. With the new fund, Novastar is opening an office in Lagos.