DEG: EUR 15 million for African tech fund

DEG – Deutsche Investitions- und Entwicklungsgesellschaft, is helping young African technology companies to gain access to long-term financing more easily. It is acquiring a EUR 15 million stake in Partech Africa Fund II (PAF II), a fund managed by Partech Partners. The Venture Capital fund will concentrate on investments in fast-growing technology companies all over Africa, including Nigeria, Egypt, South Africa, Kenya and Senegal.

The limited availability of equity capital is a major factor restricting growth for Africa’s fast-growing technology companies. This is where Partech Africa Fund II comes in. It is the largest African VC fund focusing on technology companies, like HealthTech, FinTech and RetailTech. Through its investments, predecessor fund Partech Africa Fund I helped to create more than 4.000 new jobs, among other things.

Successful first round of subscriptions with EUR 245 million

Other investors in the PAF II fund include anchor investor KfW, the European Investment Bank (EIB), the IFC (a member of the World Bank Group) and European development finance institutions FMO, BII and Proparco. By the end of the first round of subscriptions, the fund volume had already reached EUR 245 million, which is above the targeted fund size of EUR 230 million.

First African fund in DEG’s tech fund portfolio

Carola Bose, Head of DEG’s Equity Africa department, commented: “With our investment in PAF II, we are providing valuable support to the African technology and venture capital ecosystem. We are helping to bridge funding gaps for African technology companies until they are large enough to team up with, for instance, private investors or to go public. Further, we are excited to add Partech as first African Fund to our global tech fund portfolio. The Partech team has already made successful investments like Francophone Africa’s first unicorn, Wave, and through the predecessor fund it is implementing high ESG standards in the companies it finances.”

Partech Partners is a global technology venture fund manager with branches in San Francisco, Paris, Berlin, Dakar and Nairobi. Since being founded in 1982, Partech has invested in close to 500 portfolio companies in 40 countries on four continents. These include Nigerian start-up TradeDepot, which is digitalising retail distribution in Africa. Here, small retailers can view prices, discounts and other information about major brands in real time.

As one of the largest European development finance institutions, DEG helps to drive forward digitalization in its partner countries and to promote innovative business models. DEG is a global fintech and emerging markets early growth, venture capital investor.

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