Novastar Ventures has closed a $147 million Africa-focused fund (NVIII) to invest in startups that combine economic growth with climate and social impact. The fund targets sectors such as electric mobility, agriculture, and digital access, backing scalable, tech-enabled solutions that address essential needs while reducing environmental impact. Supported by institutions like Proparco under the EU-backed Choose Africa initiative, the fund reflects growing momentum behind impact-driven venture capital. It also highlights the increasing role of private capital in bridging Africa’s climate financing gap and supporting inclusive, sustainable development across the continent.
Key Overview
- Novastar Ventures closes $147M Fund III (NVIII)
- Backed by Proparco with $5M commitment
- Targets climate, mobility, agriculture, and digital access startups
- Invests $1M–$8M from seed to growth stage
- Focus on inclusive growth and environmental impact
- Part of EU-backed Choose Africa VC initiative
A Major Milestone for Climate-Focused Venture Capital in Africa
Novastar Ventures has announced the final close of its third fund, Africa People and Planet Fund III (NVIII), at $147 million, positioning it among the largest Africa-focused venture capital funds raised in recent years.
This milestone is significant not only for Novastar itself but also for the broader African venture capital ecosystem, which is increasingly attracting capital aligned with climate resilience, sustainability, and inclusive economic growth. In a global environment where venture funding to emerging markets has faced volatility, the successful close of NVIII signals continued investor confidence in Africa’s long-term growth potential, particularly in sectors addressing fundamental development challenges.
With over a decade of experience and more than $350 million in assets under management, Novastar has built a strong track record of investing in early- and growth-stage companies that operate at the intersection of technology, impact, and scalability. The firm’s approach is grounded in deep local market knowledge, with a presence in key innovation hubs such as Nairobi and Lagos, enabling it to identify high-potential entrepreneurs and support their expansion across diverse African markets.
Its investment strategy focuses on backing founders who are building scalable, tech-enabled businesses that address critical needs—ranging from access to energy and mobility to food systems and digital inclusion—while also generating measurable environmental benefits. This dual focus positions Novastar as a key player in shaping a new generation of African companies that are both commercially viable and impact-driven.
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Blending Impact with Commercial Growth
Fund III reflects a broader shift in the venture capital landscape toward dual-impact investing, where financial returns are closely aligned with measurable environmental and social outcomes. This model recognizes that long-term value creation increasingly depends on addressing systemic challenges such as climate change, resource constraints, and inequality.
The fund targets companies that:
- Expand access to essential goods and services, improving quality of life for underserved populations
- Enhance livelihoods for consumers, workers, and producers across value chains
- Deliver environmental benefits, including emissions reduction, resource efficiency, and ecosystem restoration
Key impact areas include:
- Reducing and avoiding greenhouse gas emissions, particularly through clean energy and mobility solutions
- Improving soil health and agricultural productivity, supporting sustainable food systems
- Enhancing biodiversity and ecosystem resilience, contributing to long-term environmental sustainability
This investment approach reflects a growing recognition that climate and development challenges are deeply interconnected, particularly in emerging markets. By targeting companies that operate at this intersection, the fund aims to generate both financial returns and meaningful, measurable impact.
Importantly, this strategy also demonstrates how venture capital is evolving beyond traditional growth metrics such as revenue and valuation. Investors are increasingly incorporating impact performance indicators into their decision-making, aligning capital allocation with broader sustainability goals.
Strong Institutional Backing and EU Support
A key contributor to the fund is Proparco, the private sector arm of the French Development Agency, which has committed $5 million to NVIII.
According to Oliver Game, the investment reflects strong confidence in venture capital as a mechanism for driving Africa’s green transition:
“Venture capital is a vital tool for driving the green transition in Africa… supporting founders building a more inclusive and climate-resilient future.”
This backing highlights the growing role of development finance institutions (DFIs) in catalyzing private investment in high-impact sectors. By providing early commitments and de-risking investments, DFIs help attract additional capital from institutional and private investors.
The investment is part of the Choose Africa Venture Capital programme, supported by the European Union and the European Fund for Sustainable Development Plus. These initiatives are designed to mobilize capital into high-impact startups and funds across Africa, particularly those addressing climate, sustainability, and inclusive development challenges.
By combining public support with private investment, these programmes play a critical role in strengthening Africa’s venture ecosystem, fostering entrepreneurship, and enabling the scale-up of innovative solutions. They also align with broader European strategies, such as Global Gateway, aimed at supporting sustainable infrastructure and economic development in partner regions.
Investment Strategy: Scaling Solutions Across Africa
The NVIII fund from Novastar Ventures is designed to deploy $1 million to $8 million per investment across seed to growth stages, targeting companies operating in sectors that are critical to Africa’s long-term economic and environmental development. This flexible investment range allows the fund to support startups at different stages of maturity—helping early-stage innovators validate their models while enabling growth-stage companies to scale across markets.
Already, the fund has backed six companies across high-impact sectors, including:
- Electric mobility, supporting cleaner and more efficient urban transport systems
- Delivery and logistics, improving access to goods and strengthening supply chains
- Smartphone access, enabling digital inclusion and connectivity
- Sustainable agriculture, enhancing food security and resilience
These sectors reflect Novastar’s focus on essential services and infrastructure gaps, where innovation can deliver both strong commercial returns and meaningful social impact.
A key differentiator in Novastar’s strategy is its emphasis on local market insight and operational support. With a presence in major hubs such as Nairobi and Lagos, the firm leverages deep regional expertise and networks to identify high-potential entrepreneurs and provide hands-on support as they scale. This includes strategic guidance, access to follow-on capital, and support in navigating regulatory and market complexities across different African countries.
By combining capital with active partnership, Novastar aims to build companies that are not only scalable but also resilient and adaptable to the diverse and dynamic African market landscape.
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A Growing Role for Venture Capital in Climate Finance
The successful close of the $147 million fund comes at a time when Africa faces a significant climate financing gap, with estimates suggesting that trillions of dollars will be required to meet the continent’s climate and development objectives.
In this context, venture capital is increasingly emerging as a critical channel for climate finance, particularly for early-stage and innovative solutions that are often overlooked by traditional financing sources. Unlike large infrastructure investments, these solutions require risk-tolerant capital that can support experimentation, iteration, and rapid scaling.
By investing in startups that combine commercial viability with environmental impact, funds like NVIII are playing a pivotal role in:
- Accelerating the development of climate solutions, from clean energy to sustainable agriculture
- Supporting job creation and economic inclusion, particularly in underserved communities
- Bridging the gap between innovation and large-scale deployment, enabling promising ideas to reach market maturity
This reflects a broader trend where development finance institutions and global investors are increasingly working alongside venture capital firms to de-risk and scale climate-focused investments in emerging markets. By blending public and private capital, these partnerships help unlock funding for high-impact sectors that are essential for long-term sustainability.
Outlook: Scaling Impact-Driven Innovation Across Africa
Novastar’s latest fund underscores the growing momentum behind impact-driven venture capital in Africa, even as global VC flows to the continent have experienced periods of slowdown. The ability to raise a fund of this scale highlights sustained investor confidence in the region’s innovation ecosystem and its potential to deliver both financial returns and measurable impact.
In the near term, the focus will be on:
- Scaling portfolio companies across multiple markets, enabling regional expansion
- Demonstrating measurable environmental and social impact, strengthening investor confidence
- Attracting follow-on capital, particularly from global institutional investors
These priorities will be critical in validating the fund’s strategy and ensuring that its investments deliver both financial performance and real-world outcomes.
Over the longer term, funds like NVIII are expected to play a central role in shaping Africa’s climate and innovation landscape, supporting startups that address fundamental challenges in:
- Energy access and decarbonization
- Food systems and agricultural resilience
- Urban mobility and logistics
- Digital inclusion and financial access
As the continent continues to urbanize and industrialize, the demand for sustainable, scalable solutions will only intensify. By aligning capital with impact, Novastar Ventures is helping to build a new generation of businesses capable of driving both economic growth and environmental resilience.
Ultimately, this approach reflects a broader transformation in global investment trends—where capital is increasingly directed toward solutions that not only generate returns, but also contribute to a more inclusive, climate-resilient future.
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