Agence Ecofin TikTok Agence Ecofin Youtube Agence WhatsApp


AfDB invests $10.5 mln to support African startups

Monday, 20 February 2023 17:22
AfDB invests $10.5 mln to support African startups

(Ecofin Agency) - The funds committed through the Tide Africa II fund target early-stage startups, which are the riskiest in the venture capital value chain.

The African Development Bank (AfDB) announced, Thursday, a US$10.5 million equity investment in Tide II Africa, an Africa-focused venture capital fund that invests in early-stage African technology companies. The operation will finance start-ups primarily in Egypt, Kenya, South Africa, and Nigeria, where venture capital activity is sufficiently mature.

The targeted companies, pre-seed and seed-stage start-ups operating in the financial services, consumer services, and business-to-business services sectors, will receive long-term equity investments.

The AfDB says that by financing start-ups that are not yet profitable and still in the development phase, it aims to support a sector where access to finance is difficult. "....Access to seed capital is still insufficient in most of the continent, particularly for tickets worth between $500,000 and $1 million," the institution explains.

In a project note dated January 27, 2023, the AfDB said it planned to finance the Tide Africa II fund to the tune of $10.5 million, of which $7.5 million would come from the AfDB's regular resources, while $3 million would come from the European Commission, under the Boost Africa program.

Through the Tide Africa II Fund, the AfDB is providing capital to the riskiest segment of the venture capital value chain (seed-stage companies), which faces the largest financing gap. The AfDB hopes that its commitment will "send a strong signal to potential investors and help the Africa Tide II fund reach its target size of $150 million to invest in 20 to 25 companies across the continent". TLcom Capital, which manages Tide Africa II, has chosen to take a very early-stage approach to the fund. As a result, a large portion of its commitments will go to seed financing. According to the Partech Africa 2022 report, published at the end of January 2023, the average seed deal size for African startups increased by 12% year-on-year to $1.4 million in 2022.

Chamberline Moko



Public Management

ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

Mediamania Sarl
Rue du Léman, 6
1201 Genève
Tél: +41 22 301 96 11


Benjamin FLAUX
Tél: +41 22 301 96 11
Mob: +41 78 699 13 72


Please publish modules in offcanvas position.