Novastar Ventures holds final close on target at $80 million
VC fund backs early & growth stage ventures in East Africa
On September 30th, Novastar welcomed FISEA, an investment fund advised by French development finance institution PROPARCO, as the final partner in Novastar Ventures East Africa Fund I LP. FISEA joins fellow European development finance institutions CDC, FMO, Norfund, and EIB, alongside private institutions JP Morgan, AXA Investment Management, and Triodos Bank in the Fund.
Novastar is a venture fund dedicated to finding and growing the “new stars” of East Africa. Novastar backs early and growth stage businesses led by entrepreneurs with the capability and ambition to transform markets and sectors. These enterprises address proven demand for basic goods and services with innovative business models that widen access, improve quality, and lower cost of basic goods and services for the aspiring mass market in these emerging economies. The Fund targets businesses where positive social impact for lower-income households is a result of commercial success, not an end in itself.
With $80 million of committed capital, the Fund has the scale and flexibility to tailor support to the company’s stage of development. The Fund has invested as little as $100,000 in unproven business models with high potential. Following initial small funding rounds, Novastar can then fuel the rapid growth stage of portfolio companies with more than $6 million through multiple capital rounds.
Novastar has backed eight businesses to date, each reflecting the Fund’s focus on mass-market scale potential, business model innovation, and entrepreneurial leadership. Investments include:
- Bridge International Academies – operating a branded multi-national chain of affordable, high quality primary schools serving pupils from low-income households.
- Sanergy – franchisor of sanitation centers in urban slums that provide the raw materials for a range of high-margin products including organic fertilizer.
- SolarNow – distributing and financing modular solar systems to off-grid customers in rural Uganda, addressing needs of quality, affordability and upgradability.
- Komaza – vertically integrated forester planting trees with dry-land farmers in Eastern Kenya to address the vast wood supply gap in the region.
- HiviSasa – low cost mobile platform for the delivery of county level news and targeted advertising, relevant to the mass market of readers and traders.