Kenyan based Venture Capitalist company, Novastar Ventures has launched a new $72.5 million fund called Novastar II. The fund is aims is to invest in innovative businesses providing solutions to problems in few regions of Anglophone African countries.
Novastar is a venture capital fund manager dedicated to finding and growing the “new stars” of East, and now West Africa. Novastar supports early and growth stage businesses with the capability to transform markets and sectors.
Co-founder and Managing Partner at Novastar, Steve Beck said “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. 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, thereby unlocking more capital to fuel entrepreneurship in the region.”
As cited on the company website, Novastar II is a multi-round investor with the scale and flexibility to tailor support to each portfolio company’s stage of development. The fund can invest as little as $250,000 in an unproven business model addressing a big problem in a big market. Following initial small funding rounds, Novastar can then fund the rapid growth stage of portfolio companies with more than $6 million through multiple capital rounds.
While talking about the expansion to Lagos, Andrew Carruthers who is Novastar co-founder and Managing Partner said, “We have seen how flexible long-term capital, coupled with local knowledge and innovative business models has catalysed rapid growth in some truly exceptional enterprises in East Africa, thereby attracting substantial investment from a new category of investors.
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“By establishing a presence in Lagos, with its concentration of talented entrepreneurs addressing a vast market, we want to be the spark to a similar cohort of innovative businesses generating social and economic value for the mass market, attracting substantial investment into West Africa as well’’. He said.
Novastar’s first fund of $80 million and a $10 million co-investment facility has backed 15 start-ups and will support more startups over the next few years.