IN SHORT: Novastar Ventures has closed its third fund at $147 million, 40% larger than its $105 million predecessor, with a pan-African mandate and significant new Japanese institutional capital from SBI Holdings, SMBC, Mitsubishi Corporation, JICA and others. The Green Climate Fund was anchor investor. The fund has already backed Chowdeck, Breadfast, ARC Ride and Sistema.bio.
Novastar Ventures has reached the final close of its Africa People and Planet Fund III at $147 million, one of the largest impact-focused venture capital funds ever raised for the continent, with a notable influx of Japanese institutional capital that signals a structural shift in who is backing African startups.
Founded in 2014 with offices in Lagos and Nairobi, Novastar has built one of Africa’s most established early-stage investment platforms. Fund III, raised below its original $200 million target in a tighter global fundraising climate, nonetheless represents meaningful growth and a broadened mandate.
- The fund is 40% larger than Novastar’s Fund II, which closed at $108 million in 2020. The $200 million target was not reached, reflecting the more selective global fundraising environment for Africa-focused venture capital in 2025–2026, but the final close at $147 million positions the fund among the largest of its type on the continent.
- Japanese investors make their first significant appearance in Novastar’s LP base: SBI Holdings, Sumitomo Mitsui Banking Corporation, Mitsubishi Corporation, Mitsui O.S.K. Lines and the Japan International Cooperation Agency all participated. Bloomberg reported that Japanese LPs will receive co-investment rights, deepening the Japan-Africa capital bridge Novastar is actively constructing.
- Returning development finance institutions including British International Investment, Norfund, Swedfund and Proparco renewed commitments. The Green Climate Fund served as anchor investor with a $40 million equity commitment secured in late 2025.
- For the first time, Novastar is investing across the entire African continent rather than concentrating on East and West Africa. The fund targets pre-Series A through Series B companies that have demonstrated product-market fit and are ready to scale, with initial ticket sizes of $1 million to $8 million.
- Capital has already been deployed into six companies: Chowdeck (Nigerian food delivery), Breadfast (Egyptian quick commerce), ARC Ride and Greenwheels (East African electric mobility), MoPhones (device financing) and Sistema.bio (biogas for smallholder farmers). The portfolio reflects the fund’s thesis: climate-adjacent, essential services, scalable across African markets.
- Africa faces an estimated $2.8 trillion in climate financing needs between 2020 and 2030 against committed capital that covers only a fraction of that gap. Novastar’s co-founder Andrew Carruthers noted the firm’s decade-plus track record of investing in businesses that align Africa’s growing population with planet-positive technologies.
Partner Brian Odhiambo described Japanese investors as increasingly seeking both commercial and strategic opportunities in Africa, with growing conviction that the continent’s climate challenges are also venture-scale business opportunities.
The Bigger Picture: Japanese capital entering African venture is not a coincidence. Japan faces its own demographic and resource constraints, and its industrial companies have long-horizon investment mandates that match the timelines required to build infrastructure-adjacent businesses across emerging markets. For Novastar, the Japan-Africa bridge is not just a fundraising story, it is a preview of the next wave of capital formation for the continent. When the world’s third-largest economy starts directing institutional capital toward African climate tech and mobility startups, the asset class is graduating from niche to mainstream.
Source: TechCabal / Disrupt Africa
