SBI Holdings, a prominent Japanese financial services conglomerate and one of the largest venture capital firms in East Asia, has committed $40 million to support the future funds of pan-African VC firm Novastar Ventures.
As part of this agreement, SBI Holdings will acquire a minority stake in Novastar and secure a non-executive position on its board. Riki Yamauchi, an advisor for SBI in Africa, will also join Novastar’s investment team to ensure that the partnership’s objectives are achieved. SBI Holdings has additionally pledged to encourage other Japanese institutional investors to match its investment in Novastar, reflecting the growing interest in Africa from Japan.
Commenting on this collaboration, Yoshitaka Kitao, representing SBI Holdings Inc., stated, “With Africa’s rapid growth, young and tech-savvy population, abundant natural resources, and increasing urbanization, the continent is poised to take a global leadership role in sustainable development. We recognize Novastar as the leader in African VC and look forward to establishing a new and trusted bridge between Japan and Africa for financial and strategic investments, knowledge exchange, and innovation. This partnership will leverage Africa’s megatrends for the mutual benefit of Japanese investors and African businesses.” Kitao serves as the representative director, chairman, president, and CEO of SBI Holdings.
This commitment comes at a time when Novastar is raising its third fund, The Africa People + Planet Fund, with a target of over $200 million to invest in the agriculture and climate solutions sector. Novastar plans to support startups offering services that facilitate market access and enhance resilience in the face of climate change, particularly those focused on clean technologies to decarbonize the continent’s growth and climate technologies that safeguard biodiversity, improve soil health, and capture carbon.
Novastar sees substantial value in its partnership with SBI Holdings as it raises funds to support agriculture and climate startups and intends to engage in future co-investments.
Steve Beck, co-founder and managing partner of Novastar, expressed, “Together with SBI, we see an opportunity to harness Africa’s development path towards planet-positive, inclusive business models that advance beyond environmentally harmful practices of the past, setting us on a course toward a sustainable and equitable future. Realizing this opportunity necessitates the capital, technology, and long-term perspective of corporate Japan.”
Novastar’s previous funds include the $108 million Africa Fund II, which expanded the firm’s geographic reach to encompass West Africa, and the inaugural East Africa Fund, an $80 million fund with a $12.5 million co-investment facility that invested in 15 startups within the region. Notable investees from these funds include TradeDepot, an e-commerce scale-up; Turaco, an insurtech; Moniepoint (formerly TeamApt), a fintech; mPharma, a health tech company; MoKo, a furniture startup; and iProcure, an agtech firm.
