AfDB invests in Cathay AfricInvest Innovation Fund
The board of directors of the African Development Bank has approved an equity investment of €9.8 million to support venture capital investments in African start-ups, from seed to growth stages.
Of the equity investment, €7 million will be sourced from the African Development Bank’s own resources; the additional €2.8 million represents funds provided by the European Union (EU) through a partnership with the Organisation of African Caribbean and Pacific States (OACPS).
The investment will help the Cathay AfricInvest Innovation Fund meet its target of securing €110 million to invest in over 20 early-stage ventures across sub-Saharan Africa. The Innovation Fund focuses on financial inclusion (financial tech and insurance tech), retail and logistics platforms targeting online and mobile consumers, healthcare technologies, and pay as you go, off-grid energy technologies.
More recently, the Innovation Fund has expanded its focus to include start-ups that are harnessing new digital opportunities created as a result of the Covid-19 pandemic, or with high potential to help fight the coronavirus. The Mauritius-based fund is jointly sponsored by AfricInvest Capital Partners and Cathay Innovation SAS.
Stefan Nalletamby, the African Development Bank’s director for financial sector development said, “The bank’s approval is another milestone in the implementation of the Boost Africa Program and its partnership with the EU, OACPS and the European Investment Bank. It signals the importance given to tech-enabled high growth entrepreneurs on the continent and the key role of AfricInvest and Cathay Innovation in supporting this key business segment in Africa to achieve Africa’s growth, transformation and integration objectives.”
Other investors include German KfW/Allianz GI’s AfricaGrow, public investment bank BPI and development finance institution Proparco, both of France, and Swiss impact investor Obviam.
The bank’s investment is expected to accelerate the creation of a new class of successful African entrepreneurs that will serve as a model to younger innovators. It will also support youth and women-led start-ups and increase access and inclusion to financial and ‘real sector’ services and goods through appropriate technology and innovation.
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