Partech, a global venture capital firm with multiple funds, has completed the first close of Partech Africa II (an Africa-focused fund) with €245 million (~$263 million), becoming the largest fund dedicated to Africa to date.
This is sequel to its first Africa fund which it raised €125 million announced in early 2019.
According to Partech general partners Tidjane Deme and Cyril Collon in a call with Techcrunch, the firm surpassed its target of €230 million (~$250 million) even at first close signifying interest from limited partners.
The limited partners in this Partech Africa II fund include DFIs and corporates to African fund of funds, family offices and HNIs, including anchor investor KfW, the German Development Bank. Others are existing and new LPs, including Bpifrance Investissement; the International Finance Corporation (IFC), which was investing $26 million last June; South Suez; FMO; Bertelsmann; European Investment Bank (EIB); British International Investment (BII); Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG); and Proparco.
The firm says it will now seek to reach a final close of not more than €280 million (~$300 million)
“Last year, we went out to raise fund two, and we did it in a very different market. Everything has changed; the deal flow in Africa, especially for Series A and B, has been multiplied by 14 over the last five years,” said Deme from the firm’s Dakar office.
“The average Series A ticket sizes have grown from $4 million to almost $9 million, and Series B has gone from about $10 million to $25 million. So the market has changed, and we embarked on raising fund two; the strategy is to double down on what we did with fund one because the market has validated it.”
Partech Africa plans to invest in Series A and B companies in fintech, health tech, logistics, mobility and edtech, among others from this new fund; and it is doubling the upper end of its ticket size to $15 million. It intends to deploy its capital in more than 20 startups from Fund II.
Partech’s first African fund invested in 17 startups at Series A and B stages across nine countries that operate in 27. The firm says that Partech Africa Fund brought value to over a million merchants and 20 million end users across the continent.
The fund’s strategy was to back particular startups going after deep economic sectors that are usually highly fragmented and informal in Africa “with many inefficiencies where bringing a tech platform with robust operations can build something that creates a lot of value.” Some of the startups included TradeDepot, Wave, Yoco, Vendease, Reliance and Nomba.