Africa Startup Fund Raises $147M to Back Climate Solutions

Novastar Ventures has closed a $147 million fund to back startups solving Africa's most pressing problems, proving that doing good and doing well can go hand in hand.

The Africa People and Planet Fund III represents a 40% jump from the firm's previous fund, which raised $108 million in 2020. This time, Novastar will invest across the entire African continent instead of focusing only on East and West Africa.

"Novastar's investment approach has always focused on transformative businesses that generate lasting financial, social, and environmental value for the common good," said Andrew Carruthers, Co-founder and Managing Partner. The firm has spent over a decade proving that businesses addressing Africa's biggest challenges can also deliver strong returns.

The fund has already started putting money to work, backing six companies including food delivery platforms Chowdeck and Breadfast, electric mobility startups Greenwheels and ARC Ride, smartphone distributor MoPhones, and climate-focused agritech company Sistema.bio. Initial investments will range from $1 million to $8 million per company.

One exciting development is the surge of Japanese investor interest. Major Japanese institutions including the Japan International Cooperation Agency, SBI Holdings, and Sumitomo Mitsui Banking Corporation joined the fund, creating what partner Brian Odhiambo calls "the Japan-Africa bridge."

The fund will back companies at the pre-Series A through Series B stages, the risky but crucial phase where startups have found early success but need capital to scale. Unlike traditional sector-focused funds, Novastar will invest across industries as long as companies deliver clear environmental or social benefits.

The Ripple Effect

The timing couldn't be better. As 2026 funding figures show renewed investor interest in energy and logistics, this fund positions African entrepreneurs to lead in climate solutions that benefit the entire world.

"Africa could play a big part in solving the global climate crisis," Odhiambo explained. He's seeing venture-worthy businesses tackling climate problems in ways just as compelling as traditional tech sectors.

With major development finance institutions like British International Investment and Norfund also backing the fund, African innovators now have serious capital to turn bold ideas into reality.