Novastar Ventures becomes $350 million African VC fund after $147 million raise

Novastar Ventures, one of the first and largest venture capital firms based in both Nairobi and Lagos, has closed its third Africa-focused fund at $147 million, strengthening its position as one of the continent’s leading venture capital investors in climate and impact-driven startups with a total capital of over $350 million.

The Africa People and Planet Fund III, backed by Proparco and other development finance institutions, will support startups building solutions in clean mobility, sustainable agriculture, logistics, digital infrastructure, and other essential sectors across Africa.

Fund strengthens Africa VC ecosystem

The fund closes at a time when African startups are facing tighter global capital conditions, increasing reliance on institutional and development finance-backed investment.

With more than $350 million in assets under management, Novastar continues to expand its pan-African investment strategy, targeting companies delivering both financial returns and measurable environmental and social impact.

Proparco backs climate investment push

The fund will deploy investments ranging from $1 million to $8 million, covering seed to growth-stage companies. Six startups have already been backed under the new vehicle.

Proparco committed $5 million through its Choose Africa Venture Capital programme, supported by the European Union and the European Fund for Sustainable Development Plus (EFSD+), aligning with broader green transition goals.

Novastar’s strategy focuses on businesses improving access to essential services while reducing emissions, enhancing biodiversity, and expanding digital access across African markets.

Why this matters

The $147 million close signals continued institutional confidence in Africa’s venture ecosystem despite a broader slowdown in global startup funding.

Development finance-backed capital remains a critical source of liquidity for African startups, particularly in sectors requiring patient capital such as climate technology, digital infrastructure and sustainable mobility.

The fund also underscores a wider shift in African venture investing toward businesses with clear pathways to revenue generation and measurable impact, a trend increasingly shaping capital allocation decisions across the continent.

For Africa’s startup landscape, larger pan-African funds such as Novastar’s could help bridge persistent early-stage financing gaps while supporting innovation in sectors essential to long-term economic transformation.

Africa funding faces global pressure

Novastar is expected to accelerate deployments from NVIII over the coming investment cycles as demand rises for capital among African founders building scalable solutions to infrastructure, climate and consumer-access challenges.