Partech Africa II fund has raised €280m at final close with commitments from a range of international investors, including several European development finance institutions.
Partech, a Paris-headquartered global technology investment firm with offices in Berlin, Dakar, Lagos, Dubai, Nairobi, and San Francisco, has announced the final closing of its second Africa fund, Partech Africa II, with backing from several European development finance institutions (DFI’s).
The fund has attracted more than 40 international investors, including existing investors from Partech’s Africa I fund. Among them are German development bank and anchor investor KfW, the European Investment Bank (EIB), the International Finance Corporation (IFC), Dutch development bank FMO, French public sector investment bank Bpifrance Investissement, the African Development Bank Group (AfDB), media conglomerate Bertelsmann, telecommunications company Orange and Madagascar-based African tech investors AXIAN Investment.
It has also attracted first-time investors, such as the UK DFI British International Investment (BII), KfW‘s subsidiary Deutsche Investitions – und Entwicklungsgesellschaft (DEG), France’s DFI Proparco, as well as African private equity fund of funds South Suez, reinsurer Africa Re and Dubai’s evergreen venture capital fund of funds Dubai Future District Fund. Several family offices as well as US and Middle Eastern pension funds and sovereign wealth funds have also invested, but Partech could not be drawn on names.
Partech Africa II, like its predecessor, invests in technology startups across the African continent, which the company says are changing the way technology is used in education, mobility, finance, healthcare, delivery and energy, among other sectors.
The fund targets companies fundraising in seed to Series C rounds and invests between $1m to $15m (€928,000 to €139m) in support of African companies and their founders, who are scaling their businesses across both local and international markets. It expects to build a portfolio of over 20 companies across the continent and has already made three investments. It has invested in Revio, a payment orchestration startup in South Africa that helps businesses increase payment success rates and recover lost revenue, an e-commerce platform in Senegal and an as yet unnamed real-estate platform in Egypt.
“Our LPs, including most DFIs, are perfectly aligned with our vision that startups using technology to drive innovation will be able to build ‘at-scale’ solutions that address key developmental challenges across the continent,” Tidjane Deme, general partner at Partech, told Impact Investor. “From our first fund, they can see regular reports of the extraordinary impact our companies have had on key issues such as financial inclusion, access to healthcare and job creation.”
Cyril Collon, general partner at Partech, said that almost all of the company’s Fund I investors had reinvested and some had more than doubled their commitments in Fund II.
“We are also honoured to get the support from a new set of strategic investors from the US, the Middle East and Africa, and for some of whom this marks their first commitment in African tech,” he added.
Partech also announced that with the recruitment of Tito Cookey-Gam as senior investment officer it had also opened a Lagos office, where almost a third of its African tech investments have been made.
Underinvestment in African tech
At the end of last month, Partech published its 2023 Africa Tech Venture Capital Report, which revealed that African technology startups had secured $3.5bn in total funding, both equity and debt combined, which marked a decrease of 46% from the previous year.
The report, which aims to provide a comprehensive and in-depth view into the evolution of the African tech venture capital ecosystem, also revealed a 50% decrease in active investors, from 1,149 in 2022 to just 569 in 2023.
“In this context, the capacity to anchor rounds at all stages from Seed to Early Growth, is more critical than ever,” said Collon. “It reinforces our mission to enable the emergence of technology companies that will create transformative value for African economies and shape the future of innovation globally.”
Deme added that African tech startups still represented one of the most efficient levers to create large-scale impact on key developmental issues.
“So, it’s critical that investors driving such impact objectives keep supporting technology innovation in Africa and enable early-stage investment in this space,” he said.
On a positive note and marking a modest shift towards gender diversification among recipients, the report also found that despite not escaping the downturn in VC investment, female-founded startups raised 25% of equity deals, up 3 percentage points from 2022, and accounted for 17% of total equity funding, up by 4 percentage points over the same time period.
Impact fund launch
As recently as December, Partech announced the launch of the Growth Impact Fund, the firm’s first Article 9 fund, targeting up to 15 European B2B tech companies trying to solve environmental and social challenges across the industrial, agricultural, environmental, economic empowerment and health value chains. Partech said the fund, which aims to raise up to €300m, was trying to fill a funding gap between early-stage funds and large buy-out funds by investing in companies with at least €10m of revenue which were ready to scale their businesses. The Growth Impact Fund has already made its first investment into SustainCERT, an Amsterdam-based climate impact verifier.
This article was amended on 22.02.2024 to include a quote from Tidjane Deme, general partner at Partech.
