Novastar Ventures has closed a $147 million fund to invest in African startups addressing climate and social challenges, the venture capital firm said on Tuesday, highlighting growing global appetite for impact-driven investments on the continent.
The Africa People and Planet Fund III is about 40% larger than the $105 million Novastar raised for its second Africa fund in 2020, and will target companies from pre-Series A to Series B stages that have demonstrated early product–market fit and are ready to scale.
The fund will deploy initial investments of between $1 million and $8 million under a broader pan-African mandate, expanding beyond the firm’s traditional East and West Africa focus.
Backers include returning development finance institutions such as British International Investment, Norfund, Swedfund, Proparco and Spain’s COFIDES.
A cohort of Japanese institutional investors also participated, including SBI Holdings, Sumitomo Mitsui Banking Corporation (SMBC), Mitsubishi Corporation, Mitsui O.S.K. Lines, and the Japan International Cooperation Agency (JICA), signalling growing Asian interest in Africa’s startup ecosystem.
Novastar said it is building a “Japan–Africa bridge” to deepen partnerships and offer co-investment opportunities with Japanese institutions seeking both strategic alignment and commercial returns.
The fund has already invested in six startups, including food delivery platforms Chowdeck and Breadfast, e-mobility firms ARC Ride and Greenwheels, and agritech and renewable energy company Sistema.bio.
Novastar’s previous fund backed at least 11 companies across sectors including healthcare, education, housing, transportation, fintech and energy.
Co-founder Andrew Carruthers said the new fund builds on more than a decade of investing in mission-driven businesses, with a focus on delivering financial returns alongside measurable social and environmental impact.
The close underscores rising investor confidence in Africa’s venture capital market, particularly in sectors aligned with climate resilience and inclusive economic growth.