African Development Bank earmarks €10 million equity investment

The Board of Directors of African Development Bank ( has approved an equity investment of €9.8 million to support venture capital investments in African start-ups, from seed to growth stages.

Of the equity investment, €7 million will be sourced from the African Development Bank’s own resources; the additional €2.8 million represents funds provided by the European Union (EU) through a partnership with the Organisation of African Caribbean and Pacific States (OACPS).

The investment will help Cathay-AfricInvest Innovation Fund meet its target of securing €110m to invest in over 20 early-stage ventures across sub-Saharan Africa. The Innovation Fund’s focus is on financial inclusion, including insurance and fintech, retail and logistics platforms for online and mobile customers, as well as healthcare technologies and pay-as-you-go off-grid technologies.

The Innovation Fund recently expanded its focus to include start-ups that harness new digital opportunities created by the Covid-19 pandemic or have high potential to fight the coronavirus. AfricInvest Capital Partners is sponsoring the Mauritius-based Fund. Cathay Innovation SAS is also sponsoring it.

Stefan Nalletamby, the African Development Bank’s Director for financial sector development, said: “The Bank’s approval is another milestone in the implementation of the Boost Africa Program and its partnership with the EU, OACPS and the European Investment Bank. It signals the importance given to tech-enabled high growth entrepreneurs on the continent and the key role of AfricInvest and Cathay Innovation in supporting this key business segment in Africa to achieve Africa’s growth, transformation and integration objectives.”

More than 40% of the projects in its pipeline currently cover more African regions. Another third of the start-ups it invests are located in West Africa. One quarter of all start-ups that it invests in is in the health sector.

Other investors include German KfW/Allianz GI’s AfricaGrow, public investment bank BPI and development finance institution Proparco, both of France, and Swiss impact investor Obviam.

The Bank’s investment is expected to accelerate the creation of a new class of successful African entrepreneurs that will serve as a model to younger innovators. It will also support youth and women-led start-ups and increase access and inclusion to financial and ‘real sector’ services and goods through appropriate technology and innovation.

Venture capital firms invested $2Billion in African tech in 2019, which is 73% more than the previous year. However, this funding source remains low for African start-ups. A few venture capital funds that are focused on early-stage tech start-ups have closed successful rounds.

The African Development Bank’s investment aligns with the Boost Africa program goals to enhance entrepreneurship and innovation across Africa, create new and quality jobs for young Africans, and contribute to developing an efficient entrepreneurial ecosystem in Africa.

Boost Africa is a collaboration between the African Development Bank and the European Union, the Organisation of African Caribbean and the Pacific States, (OACPS), and the European Investment Bank. It provides financial support for investment funds that target innovative early-stage enterprises in sub-Saharan Africa.

Distributed to APO Group by African Development Bank Group, (AfDB).

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