AfDB will provide €7 million from its funds to the equity fund. The additional €2.8 million will be funds from the European Union through a partnership with the Organisation of African Caribbean and Pacific States (OACPS).
The investment is expected to help Cathay-AfricInvest Innovation Fund meet its target of securing €110m to invest in over 20 early-stage ventures across sub-Saharan Africa. The Innovation Fund focuses on financial inclusion (financial tech and insurance tech), retail and logistics platforms targeting online and mobile consumers, healthcare technologies, and pay-as-you-go, off-grid energy technologies.
More recently, the Innovation Fund has expanded its focus to include startups that use emerging digital opportunities created by the COVID-19 pandemic or with a massive potential to contribute to the coronavirus fight. The Mauritius-based Fund is jointly sponsored by AfricInvest Capital Partners and Cathay Innovation SAS.
AfDB Director for Financial Sector Development, Stefan Nalletamby, in a statement, said, “The Bank’s approval signals the importance given to Africa’s tech-enabled rising entrepreneurs, as well as the significant role played by AfricInvest and Cathay Innovation in supporting this key business segment to achieve Africa’s growth, transformation and integration objectives.”
The bank’s investment is expected to accelerate the creation of a new class of successful African entrepreneurs that will serve as a model to younger innovators. Through appropriate technology and innovation, it will also support youth and women-led startups and increase access and inclusion to financial and ‘real sector’ services and goods.