Investors update: February 8, 2023 - Partech fund closes at $263m to invest in African startups.

Partech fund closes at $263m to invest in African startups

Highlights

• Partech, the global VC firm with several funds, has reached the first close of Partech Africa II at $263 million, making it the largest Africa-focused fund yet. 
• The firm, which focuses on early- and growth-stage startups across the continent, intended to raise about €230 million (~$250 million) for its second African fund and reach a first close at €150 million.
• However, overwhelming interest from LPs meant Partech Africa II surpassed what was initially set for the entire fund at first close. The African fund will now seek to reach a final close of not more than $300 million.

Source: TechCrunch

Our Takeaway

Partech Africa II further signals a strong investor appetite for opportunities in emerging markets, especially Africa. It is one of three funds the VC firm has launched in the last two years (after a $750m growth fund and a $100m seed fund). It also follows Partech Africa I, the first fund announced in 2018 and closed at $143 million. VC activity in Africa has increased greatly between then and now. Last year, startups raised $6.5 billion compared to $1.16 billion in 2018, reflecting how far the ecosystem has come, and Partech’s new fund corresponds to that growth. 

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Nigerian digital bank Umba launches operations in Kenya

Highlights

• Umba, a digital bank for emerging markets based in Nigeria, has launched operations in Kenya as it begins to expand across the continent.
• The startup aims to make it easier for consumers and SMEs to interact with banks and mobile money networks through its low-fee service. 
• After acquiring a majority shareholding in Daraja Microfinance Bank, Umba can now offer full banking services in Kenya, including current accounts insured by the Kenya Deposit Insurance Corporation (KDIC), interest-bearing savings accounts, fixed deposit accounts, lending, and payments.

Source: Disrupt Africa

Our Takeaway

Over the past few years, the digital banking wave has taken shape in Africa as startups—foreign and local—capitalize on the continent’s limited banking access, providing its people with platforms to access financial services. The need is glaring: Africa is the second-most-populous continent in the world, with around 1.3 billion people, yet only about half of the population has access to a bank account due to enduring infrastructure problems. The demographics of the African market thus offer a huge opportunity for fintech startups like Umba. 

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Moroccan agritech Sand to Green raises $1m seed round

Highlights

• Morocco-based agritech Sand-to-Green has raised a $1 million seed funding round from Norwegian Katapult and pre-seed fund Catalyst.
• Founded in 2021 by Benjamin Rombaut, Sand to Green provides a long-term solution to the problems of desertification, land degradation, and food security.
• The new funds intend to expedite Sand to Green’s operational development in order to prepare for the large-scale deployment of its Moroccan and African projects.

Source: Wamda

Our Takeaway

Sand to Green is one of a handful of innovative agritech startups that have sprung up across Africa, and are finding business opportunities in addressing the continent’s many agricultural issues. But there’s a gap in funding available to the sector compared to peers such as fintech or commerce, which underscores the importance of fundraising like this. More so, the global agritech sector is expected to reach nearly $200 billion by 2025 and Africa can only be well-positioned to play a vital role in advancing this market with adequate funding.