Partech, a prominent venture capital firm, has announced the successful closure of its second Africa-focused fund, Partech Africa II, securing a total of €280 million (over $300 million). Remarkably, this achievement comes just one year after the fund reached its initial close.
With this substantial size, Partech Africa II solidifies its position as the largest fund dedicated to supporting startups across the African continent. Originally targeting €230 million, the fund’s fundraising efforts surpassed expectations, reflecting growing confidence and interest in the African startup ecosystem.
The closure of Partech Africa II holds particular significance against the backdrop of global venture capital firms and institutional investors scaling back their investments in Africa. According to a report by Partech, the continent experienced a significant decline in investor activity in 2023, with a notable 50% decrease compared to the previous year. This trend, influenced by global economic dynamics and local challenges, translated into reduced venture capital funding for African startups, amounting to between $2.9 billion and $4.1 billion last year, down from $4.6 billion to $6.5 billion in 2022.
Partech’s continued commitment to investing in African startups through its second Africa fund underscores its confidence in the region’s potential for growth and innovation. The fund’s substantial size provides much-needed capital to support the development and expansion of promising startups, contributing to the overall vibrancy and resilience of the African startup ecosystem.
The impact of reduced investor activity was evident across all investment stages, with seed stage deals decreasing by 33% and growth stage deals by 39%, according to Partech’s findings. While Partech Africa, recognized for its leadership in funding rounds, cannot single-handedly reverse this trend, its strategic focus on seed to Series C rounds may offer stability and support for startups navigating these challenging times.
Partech Africa aims to provide comprehensive support to founders at various stages of their entrepreneurial journey, leveraging its prominent position in the ecosystem, as communicated by the firm’s general partners. Cyril Collon emphasized the importance of anchoring rounds at all stages, from seed to early growth, stating that this capability is more critical than ever.
Tidjane Deme, in correspondence with TechCrunch, highlighted that the VC firm’s expanding team will enhance its ability to deploy capital effectively and offer valuable assistance to portfolio companies across different stages of growth. With established offices in Dakar, Nairobi, and Dubai, Partech Africa has recently expanded its presence to Lagos, where it is actively recruiting to engage closely with startups in the region. This move underscores Lagos’s significance, as one-third of the firm’s portfolio companies are based there. However, Deme clarified that the majority of the second fund will be deployed between Series A and B rounds.