Novastar Ventures closes Fund II (NVAF II) with $108 million commitment

Novastar Ventures recently held the final closing of Novastar Ventures Africa Fund II (NVAF II) with total commitments of $108 million

While Novastar’s first fund was limited to East Africa, NVAF II expands its geographic reach from East to West Africa in search of founders building breakthrough businesses in the region.

Novastar backs start-ups that address proven demand for basic goods and services with innovative business models that widen access, improve
quality, and lower cost for the mass market in these emerging economies. The fund targets businesses where positive social impact for low-income households is a natural byproduct of their commercial success.

Novastar’s first fund of $80 million together with a $12.5 million co-investment facility has backed 15 companies, each reflecting the VC’s focus on mass-market scale potential, business model innovation and
outstanding entrepreneurial leadership. While that fund continues to invest follow-on capital into the successful businesses in its portfolio, NVAF II targets new early and growth stage businesses in East and West Africa.

As with its first fund, NVAF II is a multi-round investor with the scale and flexibility to tailor support to each portfolio company’s stage of development, from seed to scale.

Co-founder and Managing Partner Andrew Carruthers notes: “While Novastar now manages more than $200 million of capital, we don’t think of ourselves primarily as fund managers. The focus and real interest in our work is partnering with high-capacity, ambitious entrepreneurs to help them bring their ideas to life and multiply their impact. The COVID-19 pandemic has obviously compounded the significant challenges for entrepreneurs building businesses in our territories. The strongest entrepreneurs will seize the opportunities that arise during the crisis, and we expect to see more entrepreneurial talent released from ‘safe jobs’ that are no longer safe.”

NVAF II has already led or co-led financing rounds in three companies viz mPharma a technology-driven healthcare company, Sure Chill a platform cooling technology company and Metro Africa Xpress (MAX) a Nigerian-based on-demand motorcycle ride sharing and logistics business