Nairobi-based Africa Tech Ventures (ATV) has received $7.5m from the African Development Bank (AfDB) to boost operations of highly scalable companies across Africa according to a statement released by AfDB.
The equity investment into ATV will be invested into early stage startups that improve and facilitate access of essential goods and services to the underserved, effectively promoting inclusive growth in key sectors such as consumer goods, corporate services, education, logistics, energy, fintech, agriculture or healthcare.
The equity investment is part of the Boost Africa Investment Program, a joint collaboration between the Bank, the European Commission (EC) and the European Investment Bank (EIB), which has already committed US$10 million to the Fund.
“Africa is experiencing rapid mobile penetration. This provides huge opportunity to the development of start-ups and small and medium scale enterprises. But there is a scarce risk capital to venture capital funds targeting early stage businesses,” said Stefan Nalletamby, the Bank’s Director for Financial Sector Development.
He noted that the equity investment will “leverage innovations to leapfrog technologies and harness key opportunities that have the potential to scale across Africa.”
The overarching goal of ATV is to expand economic opportunities for African youth by providing 15 to 20 start-ups with capital throughout their growth cycle. This will enable them grow from 1 thousand to 1 million users.
In alignment with the Bank’s High 5 priorities, their innovations will contribute to broadening access to finance and using connectivity to reach people in urban, rural and remote locations, thus improving the quality of life of the underserved. The fund focus of early stage technology companies also supports Industrialize Africa and Integrate Africa.
ATV invests between USD 100,000 and USD 5mio, in exchange for a significant minority equity stake and can participate in multiple financing rounds. Some of the startups that have received funding from ATV include Cellulant, Sendy, Barefoot Power, Eneza Education, Twiga Foods, iprocure, Pezesha, Farmdrive, mSurvey and Lynk among others.