The sum of €9.8 million has been approved by the Board of Directors of the African Development Bank (AfDB) to support venture capital equity investments for African startups in seed growth stages.

According to the bank, €7 million of the equity investment will be obtained from AfDB resources while the additional €2.8 million will be provided by the European Union (EU) via a partnership with the Organisation of African Caribbean and Pacific States (OACPS).

The investment - Cathay-AfricInvest Innovation Fund - will be used to aid in the plans of raising €110 million to invest in over 20 early-stage businesses across Sub-Saharan Africa.

Some of the startups that the investment will focus on include: Financial inclusion startups (financial technology and insurance technology), logistics and retail systems for mobile and online users, pay-as-you-go, healthcare innovations, off-grid energy solutions, e.t.c.

This update was disclosed by AfDB in a press statement issued on Wednesday, 20 April.

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More recently, the Innovation Fund has expanded its focus to include start-ups that are harnessing new digital opportunities created as a result of the Covid-19 pandemic, or with high potential to help fight the coronavirus. The Mauritius-based Fund is jointly sponsored by AfricInvest Capital Partners and Cathay Innovation SAS.

AfDB’s Director for Financial Sector Development, Stefan Nalletamby, said: “The Bank’s approval is another milestone in the implementation of the Boost Africa Program and its partnership with the EU, OACPS and the European Investment Bank. It signals the importance given to tech-enabled high growth entrepreneurs on the continent and the key role of AfricInvest and Cathay Innovation in supporting this key business segment in Africa to achieve Africa’s growth, transformation and integration objectives.”

Over 40% of the initiatives in its current pipeline span multiple African regions. West Africa accounts for a third of the start-ups in which it invests. One-quarter of all shareholder start-ups are in the healthcare industry.

AfricaGrow of Germany’s KfW/Allianz GI, Swiss impact investor Obviam as well as France’s public investment bank BPI and development financing organization Proparco, as well as are among the other investors