Novastar closes $147m fund to scale technology-driven businesses across Africa

Capital will support startups using digital platforms and climate-focused solutions to expand access to essential goods and services

Andrew Carruthers, co-founder and managing partner at Novastar.

Novastar Ventures, a venture capital firm focused on early and growth-stage companies in Africa, has completed the final close of its third fund, Africa People and Planet Fund III, at US$147 million. The firm, which operates from offices in Nairobi and Lagos, invests in businesses that use technology-enabled models to deliver essential products and services to underserved markets.

The new fund builds on Novastar’s previous investment strategy but expands its geographic scope. While earlier funds concentrated on East and West Africa, this vehicle will allocate capital across the continent, targeting companies that combine commercial growth with solutions linked to resource efficiency, access, and climate-related challenges.

Part of the funding includes a US$40 million equity commitment from the Green Climate Fund, reflecting a focus on companies that incorporate environmental considerations into their operations. The fund invests across stages, from seed to scale, with initial investments ranging from US$1 million to US$8 million.

Novastar’s model centres on identifying businesses where demand for basic goods and services already exists, and supporting the use of digital platforms, logistics systems, and distributed infrastructure to improve delivery and reach. This includes sectors such as food distribution, mobility, financial access, and agriculture, where technology can be used to connect suppliers and consumers more efficiently.

The fund has already invested in six companies operating in areas such as grocery and food delivery, electric mobility, device access, and agricultural technology. These businesses use a combination of software platforms, data-driven operations, and local distribution networks to scale services in markets where infrastructure gaps persist.

Investor participation in the fund includes development finance institutions and private capital, with contributors from Europe, Japan, and other global markets. This mix reflects continued interest in technology-enabled business models addressing access and infrastructure constraints in African economies.

“Novastar’s investment approach has always focused on transformative businesses that generate lasting financial, social, and environmental value for the common good. NVIII is a natural progression of that strategy, leveraging over a decade of experience backing businesses addressing Africa’s biggest challenges, while driving a sustainable development pathway for Africa, and the world,” said Andrew Carruthers, co-founder and managing partner at Novastar.

With this fund, the firm aims to support companies that integrate digital tools and operational systems into sectors traditionally limited by fragmentation, enabling them to expand services while maintaining cost and delivery efficiency.