Japanese financial conglomerate SBI Holdings has made a landmark $40 million multi-fund commitment to Novastar Ventures, a leading Pan-African VC firm. This marks SBI’s first direct investment into an African VC, expanding its presence in the continent’s startup ecosystem.
As part of the deal, SBI will take a minority stake in Novastar and gain a board seat to advise on Africa’s strategy. SBI’s Riki Yamauchi will join Novastar’s investment team to ensure partnership objectives are achieved.
SBI also pledged to rally other Japanese institutional investors to match its Novastar investment, reflecting growing Japanese interest in African opportunities.
SBI Holdings Chairman and CEO Yoshitaka Kitao said Africa’s rapid growth, young population, and increasing urbanisation position it for global leadership in sustainable development. He recognised Novastar as the top VC in Africa and expressed excitement to build a new bridge between Japan and Africa for investment, knowledge transfer and innovation.
The SBI commitment comes as Novastar raises its third fund, the $200M+ Africa People + Planet Fund, to back agriculture and climate tech startups. Novastar sees strategic value in partnering with SBI amidst this crucial fundraiser.
Novastar Managing Partner Steve Beck said together, they can harness Africa’s development towards inclusive, sustainable business models that avoid polluting practices of the past. Realising this opportunity requires the long-term mindset and resources of Japanese corporations like SBI.
Previous Novastar funds include the $108M Africa Fund II, which expanded reach into West Africa, and the inaugural $80M East Africa Fund. Portfolio highlights include TradeDepot, mPharma, MoKo, and iProcure.
With agriculture and climate fundraising underway, Novastar is poised to scale its impact on priority sustainable sectors. The SBI anchor investment validates Novastar’s fund thesis and could mobilise additional Japanese capital.
For SBI, the partnership diversifies its African startup portfolio beyond direct company investments like Apollo Agriculture and Mono. Leveraging Novastar’s local expertise and network promises to enhance SBI’s continental strategy.
The collaboration accentuates growing two-way interest between African and Asian powerhouses. As Japan weighs greater economic engagement with emerging African markets, partnerships like SBI-Novastar can pave the way for sustainable, mutually beneficial development.
From Novastar’s perspective, securing backing from one of Japan’s largest financial groups demonstrates its fundraising clout and industry stature. The alliance also unlocks invaluable inroads into Japanese investment circles as Novastar consolidates its position as a top-tier African VC.
With impact objectives aligning, the partnership seems poised to foster cross-border innovation and capital flows. SBI’s choice of Novastar as its inaugural African VC investment spotlights the fund’s promising outlook.