AfricInvest, a leading African private equity fund, and Cathay Innovation, the global VC fund launched by Paris-based Cathay Capital, have announced the launch of the Cathay Africinvest Innovation fund.
With a fundraising target in place of 150 million Euro (US$168 million), the fund will focus on investments spanning Series A through Series C stages in African tech companies advancing agtech, AI, logistics, fintech, and edutech.
Positioning itself as the first pan-African venture fund “to connect the whole continent and the world’s leading innovation ecosystems”, the Cathay Africinvest Innovation fund will be able to leverage the diverse presence of AfricInvest across the continent through its eight offices, and its team’s deep knowledge and experience with African entrepreneurial networks, together with the global platform built out by Cathay Innovation that connects technological ecosystems across Europe, China, and the U.S.
Founded in Tunis in 1994, AfricInvest is a leading private equity and venture capital investor across North and sub-Saharan Africa with $1.5 billion in assets under management. The firm has a team of 75 investment professionals of 15 different nationalities working out of its offices in Abidjan, Algiers, Cairo, Casablanca, Dubai, Lagos, Nairobi, Paris Port Louis, and Tuni, and an office soon-to-be in Johannesburg covering all of Africa and France. Through these operations AfricInvest manages 18 private equity funds touching upon four strategies, and is sponsored by development financial institutions (DFIs), private, and institutional investors from Africa, Asia, Europe, and North America.
Cathay Capital Private Equity is focused on the international expansion of middle market companies in North America, China, and Europe. With a team of 90 professionals based in New York, Shanghai, Beijing, Paris, Munich, San Francisco, and Tel Aviv, and with 2.5 billion Euro (US$2.8 billion) in assets under management, Cathay is well placed to create value across three continents.
“We are excited about the combination of experience, expertise and networks that will be delivered through this partnership between AfricInvest and Cathay, a world-class investor,” said Aziz Mebarek, co-founder and managing partner, AfricInvest. “Our combined objective is to provide support to a new generation of African companies in cutting-edge fields, with the ambition to grow them regionally and globally.”
In regard to agtech investing, the timing of the launch of the Cathay Africinvest Innovation fund is strategically sound.
Of the sub-Saharan population, more than 60 percent rely on agriculture for their livelihoods, and a significant 23 percent of the sub-Saharan GDP is derived from agricultural production, according to McKinsey. However, at the same time, there exist serious yield gaps and untapped potential across the continent. McKinsey finds that Africa has the potential to produce up to three times more cereals and grains compared to current levels, as well as greater output for horticulture and livestock production. The intersection of dynamics such as these create a landscape ripe for agtech disruption.
In recent years there has been a boom in agtech startups across Africa. As of the beginning of 2018, there were 82 active agtech startups with 43 new ventures launched in 2016 alone, according to the Agrinnovating for Africa: Exploring the African Agri-Tech Startup Ecosystem Report 2018. And over the course of only a single year (2016-2017) fundraising by these startups jumped by 121 percent.
Such a landscape presents a broad opportunity for Cathay and AfricInvest as they look to join the 51 existing Africa-focused global VC firms active as of last year.
“This partnership is based on shared vision and values, as well as ambitious objectives in terms of impact and return on investment,” said Mingpo Cai, co-founder and chairman of Cathay Innovation. “This Fund will also provide Cathay Innovation’s portfolio companies with access to fast-growing African markets. We are convinced that this partnership will contribute to changing the financing and development of innovation in Africa.”
-Lynda Kiernan
The post AfricInvest and Cathay Innovation Launch $168M Pan African Tech Fund appeared first on Global AgInvesting.