€120m AfricInvest venture fund to back agtech startups

The vehicle targets family offices, DFIs, corporates and foundations as it eyes a first close by the end of the year, VC chief Selma Ribica tells Agri Investor.

Agtech startups account for a fifth of the deal pipeline for a €120 million venture capital fund being raised by Tunisia-based AfricInvest, according to the executive leading the effort.

The private equity firm expects the sector-agnostic fund, officially announced at a conference earlier this month, will also back startups in fintech, energy, education, logistics, health and other sectors.

AfricInvest VC director Selma Ribica told Agri Investor that the AfricInvest Growth VC Fund is expected to hit a first close on €50 million by the end of 2018. She said the milestone will likely be reached thanks to pledges from about five investors. The fundraising effort is focused on family offices, development finance institutions, corporates and foundations in Europe and North America, she added.

Pain points

The vehicle will make investments of $3 million-$10 million, according to Ribica, who said her firm has noted a hole in the capital market for Series B and later African startups looking for investments of $5 million and above.

“Venture capital in Africa is a nascent industry,” said Ribica. “What these companies need is not only capital. They need someone with teams on the ground who can work together with founders, sit on the board and leverage networks in Africa that help them grow from one country to become regional champions.”

Ribica said AfricInvest’s investments in 140 companies in various sectors across Africa – and successful completion of 80 exits – leaves it well-placed to bring together the types of networks fledgling enterprises need.

“I see more startups addressing water efficiency and diagnostics of diseases in North Africa and more marketplace and storage startups in West, East and sub-Saharan Africa”
Selma Ribica

About 20 percent of investments currently being considered by the AfricInvest Growth VC Fund are related to agriculture and the firm plans to design investments in the sector to directly address “pain points” that hamper efficiency across the continent.

“These pain points are due to the lack of existing infrastructure, education or access,” she said. “With technology, we can address various pain points and improve the efficiency of the entire process.”

For example, she noted, the fund will look to back successful startups throughout Africa that are engaged in precision agriculture, water-use efficiency and solar-powered food storage to reduce post-harvest waste. It will also look to take advantage of efforts that harness cellphones to help farmers find and maintain access to markets.

Hubs and spokes

AfricInvest has offices in Tunis, Nairobi, Lagos, Abidjan and Algiers. Ribica said the firm receives pitches from promising ag startups in each office.

“I see more startups addressing water efficiency and diagnostics of diseases in North Africa and more marketplace and storage startups in West, East and sub-Saharan Africa,” she added. “Overall, there are needs in agriculture that can addressed with technology in a more efficient way all across.”

Ribica said the growth of burgeoning regional tech hubs in Lagos, Cape Town, Nairobi and Cairo are starting to inspire “start-up ecosystems” of incubators, accelerators and entrepreneurs and neighboring countries. AfricInvest plans to allocate a small portion of the AfricInvest Growth VC Fund to serve as a “seed pool” focused on investments backing earlier-stage startups in these adjacent markets.

“In these hubs, the Series B pipeline may not be as developed. However, we may come across interesting opportunities and we want to play a role there.”