Cathay AfricInvest Innovation Fund closes €110mn VC fund for Africa

AfricInvest, a multi-asset investment platform in Africa, and global venture capital firm Cathay Innovation have successfully completed the final close of their joint Pan-African Venture fund, Cathay AfricInvest Innovation Fund, at an impressive €110 million. This significant milestone marks a new chapter in the investment landscape in Africa, bringing hope and financial support to innovative startups across the continent seeking to scale and expand their operations. Khaled Ben Jilani, a Senior Partner at AfricInvest, shed light on the journey of this fund and its strategic importance in an exclusive interview with CNBC Africa. The Cathay AfricInvest Innovation Fund, a product of years of dedication and hard work, was initially raised over the past three to four years. The challenging environment posed by the COVID-19 pandemic accelerated the fundraising process in the last year, culminating in the €110 million fund. This fund is designed to focus on investing in African startups that are multi-country based, post-revenue, and operating at Series A and Series B rounds. The investment size typically ranges from two to seven million dollars, with round sizes falling between 22 to 50 million dollars. Ben Jilani emphasized the crucial need for more African venture capital funds to support the burgeoning ecosystem of startups on the continent. Rather than relying on external sources for funding, having local investment vehicles like the Cathay AfricInvest Innovation Fund is vital for nurturing and scaling African startups, both within and beyond the continent's borders. By providing financial backing and strategic guidance, the fund aims to empower startups to achieve growth and success on a global scale. The fund's investment strategy focuses on disruptive early growth stage startups across various sectors, with a keen interest in sectors like Fintech, healthcare, and education. Fintech, in particular, plays a pivotal role in transforming the financial landscape in Africa, where most transactions are still cash-based. The fund recognizes the immense potential in Fintech innovation and aims to drive evolution and adoption in this space over the next few decades. Similarly, investments in healthcare and education sectors seek to address critical gaps in service delivery and inclusivity. The strategic partnership between AfricInvest and Cathay Innovation brings together complementary strengths and global networks to support portfolio companies in their growth journey. AfricInvest's deep understanding of the African market, coupled with Cathay Innovation's extensive global reach across Europe, the US, Southeast Asia, China, and Latin America, provides a robust support system for startups looking to expand internationally. The collaboration facilitates access to diverse networks, knowledge sharing, and cross-regional learning, enhancing the growth prospects for startups under the fund's portfolio. Within the €110 million fund, 95% of the investments are earmarked for growth stage startups, underscoring the fund's commitment to supporting businesses at critical growth phases. The fund's focus on Series A and Series B rounds fills a crucial gap in the funding landscape, as many initiatives tend to target earlier-stage startups. By directing resources towards startups poised for significant growth and scalability, the Cathay AfricInvest Innovation Fund aims to catalyze the development of sustainable and profitable businesses that can stand on their own. As the fund sets its sights on empowering startups to reach new heights, Ben Jilani emphasizes the importance of fostering a vibrant ecosystem where African startups can thrive and compete on a global level. With a focus on growth-stage opportunities and a strategic partnership driving synergies and knowledge exchange, the Cathay AfricInvest Innovation Fund stands as a beacon of hope and support for the next generation of African entrepreneurs. In conclusion, the successful closure of the €110 million fund represents a significant milestone in the African venture capital landscape, signaling a new era of growth, innovation, and collaboration in the startup ecosystem. As more funds like the Cathay AfricInvest Innovation Fund come to the fore, African startups can look forward to enhanced support, mentorship, and funding opportunities that propel them towards sustainable success and global recognition.