The United States International Development Finance Corporation (DFC) has invested $25 million in Novastar Ventures, a Pan-African venture capital firm, to support startups developing agriculture and climate solutions.
The funds will be invested in Novastar’s new Africa People + Planet Fund.
The Africa People + Planet Fund is Novastar’s third pool, following the $108 million Africa Fund II, which expanded the company’s geographical reach to include West Africa. The East Africa Fund, a $80 million fund with a $12.5 million co-investment facility, was the firm’s first investment, which went into 15 startups in the region.
Novastar’s previous two funds invested in tech-enabled startups serving the mass market in industries such as agriculture, education, and off-grid renewable energy.
Among the startups in which Novastar has invested are TradeDepot, an e-commerce scaleup, Turaco, Moniepoint (formerly TeamApt), and mPharma.
Novastar will also invest in climate tech startups that use innovative business models to “deploy regenerative forestry, agriculture and aquaculture, biofuels, and biochar, which protect biodiversity, improve soil health, and capture carbon,” according to the company.
Marketplaces, financial, and supply chain services that will enable access to market and resilience in the face of climate change are among the startups targeted. Clean utilities, clean construction technologies, electric mobility, smart logistics, the circular economy, and alternative materials are among the cleantechs that the VC firm plans to back.
“Going forward, we hope to build on this experience and apply the same tools and strategies to support sustainable, planet-positive, mass-market business models across Africa from which the rest of the world can learn,” Carruthers said