Novastar Ventures Secures $40 Million Backing from SBI Holdings

SBI Holdings, a prominent Japanese financial services conglomerate and leading venture capital firm, has pledged a significant $40 million multifund commitment to anchor the future funds of Pan-African venture capital firm Novastar Ventures.

This commitment marks SBI Holdings' maiden direct investment in a venture capital initiative in Africa, a noteworthy milestone for the Tokyo Stock Exchange-listed company.

SBI Investment, a subsidiary of SBI Holdings, has already established a presence in the African startup ecosystem through strategic investments in companies such as Apollo Agriculture, Mono, the former WhereIsMyTransport, Hakki Africa, and Kepple Africa, a venture capital fund.

Following the agreement, SBI Holdings will acquire a minority stake in Novastar and secure a non-executive seat on its board as SBI's adviser in Africa.

Riki Yamauchi, a representative of SBI Holdings, will join Novastar's investment team to oversee the realization of the partnership's objectives.

Yoshitaka Kitao, Representative Director, Chairman, President, and CEO of SBI Holdings, expressed enthusiasm about the partnership, stating, "With its rapid growth, young and tech-savvy population, abundant natural assets, and increasing urbanization, Africa is poised for global leadership on sustainable development."

SBI Holdings has committed to rallying other Japanese institutional investors to match its investment in Novastar, aligning with the growing interest in Africa from the East Asian country.

Commenting on the collaboration, Kitao highlighted the potential for building a new, trusted bridge between Japan and Africa for financial and strategic investment, knowledge transfer, and innovation learnings.

He emphasized that the partnership would leverage Africa's megatrends for the mutual benefit of Japanese investors and African businesses.

This landmark commitment comes at a crucial juncture for Novastar as it seeks to raise its third pool, The Africa People + Planet Fund, with a target of over $200 million.

This fund aims to invest in the agriculture and climate solutions sector, supporting startups that facilitate access-to-market and resilience in the face of climate change.

Novastar plans to back startups contributing to the decarbonization of Africa's growth and those involved in climate technologies that protect biodiversity, enhance soil health, and capture carbon.

Steve Beck, Co-founder and Managing Partner of Novastar, emphasized the strategic value of the partnership with SBI Holdings as they raise funds for agriculture and climate startups, envisioning collaborative investments in future deals.

Beck highlighted the opportunity to harness Africa's development path towards planet-positive, inclusive business models, leveraging the capital, technology, and long-term mindset of corporate Japan.

Annie Njanja / TechCrunch