To guarantee major boost for Africa’s startup ecosystem, Novastar Ventures has announced the final close of its third fund, the Africa People and Planet Fund III (NVIII), at an impressive $147 million.
The milestone not only marks a 40 per cent increase from its previous fund but also positions NVIII among the largest Africa-focused venture capital funds to date.
With fresh backing from global investors, including a $40 million equity commitment from the Green Climate Fund, the fund shows a growing international appetite for startups that address Africa’s most pressing needs while advancing climate-conscious solutions.
As Novastar’s co-founder and managing partner, Andrew Carruthers, puts it, the new fund represents “a natural progression” of the firm’s long-standing mission to support “transformative businesses that generate lasting financial, social, and environmental value for the common good.”
What is Novastar Ventures?
Founded as one of the earliest venture capital firms focused on Africa, Novastar Ventures has built a reputation for backing startups that solve everyday problems with scalable, innovative models.
Operating out of Nairobi and Lagos, the firm concentrates on sectors that directly impact people’s lives, such as food systems, mobility, financial inclusion, and access to essential goods.
Its investment philosophy is rooted in identifying businesses that meet “proven demand for basic goods and services,” ensuring that its portfolio companies are not only innovative but also deeply relevant to local markets.
How Special is Novastar’s Operating Model?
What distinguishes Novastar is its dual focus on impact and profitability. Unlike traditional investors that may prioritise quick returns, the firm deliberately targets businesses that balance economic growth with social and environmental benefits.
This approach has enabled it to carve out a niche as a leading “impact investor” in Africa. The firm’s strategy also reflects a long-term commitment to the continent.
Over more than a decade, it has consistently backed companies tackling systemic challenges, from food distribution inefficiencies to clean energy access.
Carruthers emphasised this continuity, noting that Novastar’s approach has “always focused on transformative businesses” that create lasting value beyond financial returns.
What to Know About the Newly Raised $147 Million
The $147 million raised under NVIII is significant for several reasons. First, it represents a 40 per cent increase over Novastar’s previous fund, underscoring growing investor confidence in Africa’s startup landscape.
Second, the fund attracted a diverse global investor base, including development finance institutions such as British International Investment, Norfund, Swedfund, Proparco, and COFIDES, alongside private capital and a “growing cohort of Japanese institutions.”
The inclusion of the Green Climate Fund is particularly noteworthy, as it highlights the increasing alignment between climate finance and venture capital in Africa. This blend of capital sources positions NVIII as both a financial and developmental tool aimed at scaling high-impact businesses.
What is “Fund III” (NVIII)?
The Africa People and Planet Fund III (NVIII) is Novastar’s third major investment vehicle, but it represents a strategic evolution. For the first time, the firm will deploy capital on a pan-African basis, moving beyond its earlier concentration on East and West Africa.
This shift significantly broadens Novastar’s reach, enabling it to partner with entrepreneurs across the continent.
The fund is designed to invest from seed stage to scale, with initial investments ranging between $1 million and $8 million, ensuring support for startups at different growth phases.
What Kind of Startups Will this Benefit?
NVIII is focused on startups that align economic growth with environmental sustainability, what the firm describes as “businesses that align the economic interests of Africa’s growing population with planet-positive technologies.”
Already, the fund has backed six high-growth companies, including:
Chowdeck and Breadfast, which are scaling food and grocery delivery services
Greenwheels and ARC Ride, driving the transition to electric mobility
MoPhones, improving access to affordable smartphones
Sistema.bio, delivering climate-smart solutions for farmers
These investments highlight a clear pattern, that’s, startups that solve real, everyday challenges while leveraging innovation to scale.
Why This Matters to Africa’s Startup Ecosystem
The closing of NVIII comes at a crucial time for Africa’s venture ecosystem, which has faced funding slowdowns amid global economic uncertainty. A fund of this size not only injects much-needed capital but also sends a strong signal to global investors about the continent’s long-term potential.
More importantly, Novastar’s focus on “people and planet” reflects a broader shift in how African innovation is being financed, moving beyond pure growth metrics to include sustainability and social impact.
By backing startups that address structural challenges such as food access, clean transport, and digital inclusion, NVIII contributes to building a more resilient and inclusive economy.
As Carruthers noted, the fund leverages “over a decade of experience backing businesses addressing Africa’s biggest challenges,” while simultaneously “driving a sustainable development pathway for Africa, and the world.”
In essence, NVIII is not just about funding startups, it is about shaping the future of Africa’s development through innovation.
Talking Points
Novastar’s $147 million fund underscores a renewed wave of confidence in Africa’s startup ecosystem, but it also reveals both the promise and structural limitations of impact-driven venture capital on the continent.
Novastar Ventures deserves credit for aligning profitability with social and environmental outcomes, especially with backing from institutions like the Green Climate Fund. Yet, the model still leans heavily toward startups that can scale within venture-backed frameworks, potentially sidelining smaller, informal, or less “venture-friendly” solutions that also address critical grassroots challenges.
Moreover, the fund’s ticket sizes of $1–8 million, while substantial, may concentrate capital in already visible urban startups rather than truly underserved regions, raising questions about inclusivity despite its pan-African ambition.
That said, its sectoral focus on food systems, mobility, and climate-smart technologies is timely and strategically aligned with Africa’s development priorities, and its ability to attract diversified global capital signals growing maturity in the ecosystem.
Overall, NVIII represents a strong step forward, but its long-term impact will depend on how effectively it balances scale with depth, and innovation with equitable reach across the continent.
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