Norrsken22 secures $205m to back high-growth startups in Africa

Key Takeaways

The timing of this news is especially opportune, as venture capital inflow into Africa has seen a decline over the past year. This development comes as a welcome boost, particularly for startups in the growth and expansion phase. The challenge of insufficient late-stage investments remains prevalent in the venture capital landscape, despite recent improvements. This shortfall sometimes forces startups to exit prematurely due to the looming threat of running out of funding. Although venture capital firms have made efforts to introduce late-stage capital into the ecosystem, there is still substantial room for more investments. In 2022, investors deployed $1.1 billion across 16 late-stage deals, marking a 6% decrease in volume and a 51% decrease in value, as per AVCA data. Typically, international funds take the lead in most large deals in Africa, while local investors primarily focus on pre-seed to Series A rounds with smaller to medium-sized funds. Larger Africa-focused funds like Norrsken22 aim to bridge the gap between growth and late-stage investments. Approximately 50% of Norrsken's capital will be allocated to building its portfolio with Series A and B companies, with the remaining portion reserved for follow-on investments, primarily in the B and C rounds.