Partech has successfully concluded the fundraising for its second Africa-focused fund, Partech Africa II, amassing over €280 million ($300 million), surpassing its initial target of €230 million. This achievement not only marks a significant milestone for Partech but also establishes it as the leading fund dedicated to African startups, especially at a time when the continent is experiencing a notable downturn in venture capital activities.

The recent closure of Partech Africa II is particularly noteworthy against the backdrop of a global decline in venture capital interest in Africa. A 50% decrease in investor activity in 2023, as compared to the previous year, underscores the challenges faced by African startups, with venture capital inflows dropping to between $2.9 billion and $4.1 billion from the $4.6 billion to $6.5 billion reported in 2022. This downturn has impacted investments across all stages, with seed-stage deals seeing a 33% reduction and growth-stage deals dropping by 39%.

Despite these market challenges, Partech Africa's commitment to supporting startups from seed to Series C rounds is poised to provide a much-needed stability and support network for entrepreneurs navigating these turbulent times. Cyril Collon, one of the firm's general partners, emphasized the importance of their role in anchoring investment rounds across various stages, highlighting the critical nature of such support in the current economic climate.

Cyril Collon

The fund's strategic expansion and team growth enable it to effectively deploy capital and assist portfolio companies through their development stages. With offices in Dakar, Nairobi, Dubai, and a new setup in Lagos, Partech Africa is intensifying its engagement with startups across the continent, focusing particularly on Series A and B rounds. This geographical spread is strategic, considering a significant portion of its portfolio companies are based in these regions.

READ ALSO - Join the Morgan Stanley Inclusive Ventures Lab for a Chance to Win $250K

Investments from Partech Africa II have already commenced, with notable contributions to Revio, a South African payment orchestration platform, and undisclosed investments in an Egyptian proptech and a Senegalese e-commerce startup. The fund plans to support over 20 companies, with initial investments ranging from $1 million to $15 million.

Targeting sectors critical for Africa's economic activity and employment, such as fintech, agtech, health tech, retail, and FMCG, Partech has already made significant investments in startups like Wave, TradeDepot, Yoco, and Reliance through its first fund. The firm continues to offer capital and support to these companies, though follow-on capital from the second fund will be reserved for new investments.

The investor base for Partech Africa II is diverse, featuring development finance institutions, commercial investors, African fund-of-funds, family offices, and new entries such as U.S. and Middle Eastern pension funds, sovereign funds, the Dubai Future District Fund (DFDF), and the African Reinsurance Corporation (Africa Re). This broad investor support, with many from the first fund increasing their commitments, signifies strong confidence in Partech's strategy and its impact on African tech innovation.

The emergence of Partech’s second fund highlights the continued investor interest in Africa’s growth potential, alongside other significant funds launched in the region. This trend underscores the resilience and attractiveness of the African startup ecosystem, even in the face of fundraising challenges and market scrutiny.