Novastar Ventures, one of Africa’s pioneering venture capital firms, has announced the final close of its third fund, the Novastar Ventures Africa People and Planet Fund III (NVIII) at $147 million.
The new fund represents a 40% increase from its predecessor, Novastar Ventures Africa Fund II, which closed at $108 million in 2020.
While it fell short of the original $200 million target amid a challenging global fundraising environment, the close underscores sustained investor confidence in African startups addressing climate change and social impact.
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Speaking on the funds raised, Andrew Carruthers, Co-founder and Managing Partner at Novastar said,
“Novastar’s investment approach has always focused on transformative businesses that generate lasting financial, social, and environmental value for the common good. NVIII is a natural progression of that strategy, leveraging over a decade of experience backing businesses addressing Africa’s biggest challenges, while driving a sustainable development pathway for Africa, and the world.”
Unlike previous funds that concentrated on East and West Africa, Fund III adopts a truly pan-African strategy, deploying capital wherever high-potential opportunities emerge across the continent. The fund targets early- and growth-stage companies in sectors such as:
– Agritech and sustainable food systems.
– Electric mobility and green transport.
– Climate tech, circular economy, and decarbonization solutions.
– Broader impact-driven innovations that promote clean, inclusive, and sustainable development.
Investments will support technologies and business models that help African countries meet their Nationally Determined Contributions (NDCs) under the Paris Agreement, including electric vehicles, smart logistics, renewable energy integration, and low-emission agriculture.
A standout feature of Fund III is the significant participation from Japanese institutions, signaling deepening Asia-Africa investment ties.
The Green Climate Fund also provided substantial backing, further reinforcing the fund’s climate credentials.
Partner Brian Odhiambo highlighted the strategic interest from Japanese investors: “They are looking for both commercial growth opportunities and ways to contribute to sustainable development in Africa.”
Novastar has moved quickly with capital deployment. The fund has already invested in six companies which include:
– Chowdeck and Breadfast — food delivery and quick commerce platforms enhancing urban logistics.
– Greenwheels and ARC Ride — electric mobility startups offering cleaner transport alternatives.
– MoPhones — smartphone distributor expanding digital access.
– Sistema.bio — climate-focused agritech providing biogas solutions for smallholder farmers.
These early bets reflect the fund’s thesis of supporting scalable businesses in areas like natural resource management, clean energy, sustainable agriculture, mobility, and inclusive services that build resilient, low-carbon economies across the continent..
Novastar was founded in 2014, to join and fuel an entrepreneurial revolution that is transforming markets and sectors in Africa. Leveraging local insights and networks, the VC firm partners with the bold entrepreneurs forging solutions to the continent’s biggest problems.
Outlook
The successful close of Fund III positions Novastar Ventures to play an even more influential role in shaping Africa’s climate and impact investment landscape at a time when global capital flows to emerging markets are becoming more selective.
Despite missing its initial $200 million target, the $147 million raise signals that investor appetite for mission-driven, climate-aligned African startups remains resilient, particularly in sectors tied to sustainability, food security, and clean energy.
As pressure mounts globally to meet climate goals, Africa is increasingly seen not just as a beneficiary of capital, but as a critical frontier for scalable, climate solutions.
The fund’s pan-African mandate is also likely to unlock opportunities in undercapitalized markets beyond traditional hubs like Nigeria, Kenya, and South Africa, potentially broadening the innovation map across the continent.