In a significant milestone for African growth-stage investing, Norrsken22 has announced the final close of its debut fund, raising $200 million to invest in innovative startups across the continent. This achievement marks a major step forward in addressing the pressing need for capital at Series A and beyond in Africa.
The Fund’s Focus and Investment Strategy
Norrsken22’s focus is on supporting high-growth startups with scalable business models, led by visionary entrepreneurs who are poised to become industry leaders. The fund invests between $10 million and $16 million per company, with a typical investment ticket size of around $10 million.
The fund’s advisory council consists of esteemed business leaders from multinational corporations in Africa, including banking, telecommunications, agriculture, and real estate. This strategic collaboration enables Norrsken22 to provide comprehensive support to its portfolio companies, fostering growth and preparing them for successful exits.
Preparing Portfolio Companies for Exits
A key focus area for Norrsken22 is ensuring that its portfolio companies are well-prepared for exit scenarios. The fund evaluates potential exit scenarios, identifies potential buyers, and assesses valuations they might offer at the end of the investment period. This diligence allows Norrsken22 to decline investments where a compelling exit case is not evident.
The managing partner posits that the firm is looking at exits for its portfolio companies through international strategic buyers and consolidation involving local industry leaders. Large multinational corporations in Africa could also present exit opportunities to startups, often seeking innovation by acquiring tech businesses that can be integrated into their operations or kept as separate entities under a different brand.
Addressing the Shortage of Capital in Series A and Beyond
The lack of capital in Series A and beyond is a pressing concern for African startups. To address this issue, several growth-stage firms have raised one to two funds over the past couple of years. Norrsken22 joins this cohort, alongside Partech Africa, TLcom Capital, Algebra Ventures, Sawari Ventures, and Novastar Ventures.
While some of these funds have also invested at the pre-seed and seed stages, Norrsken22’s primary focus remains on growth-stage investing. However, if an exciting opportunity arises, the fund may put aside a small amount for the opportunistic earliest stage.
African B2B E-commerce Startup Sabi Tops $300M Valuation in New Funding
In related news, African B2B e-commerce startup Sabi has secured new funding, taking its valuation to over $300 million. This development highlights the growth potential of Africa’s e-commerce sector and underscores the need for innovative solutions to meet the evolving needs of businesses across the continent.
Conclusion
Norrsken22’s achievement in raising $200 million for its debut fund marks a significant milestone for African growth-stage investing. The fund’s focus on supporting high-growth startups with scalable business models, led by visionary entrepreneurs, is well-positioned to address the pressing need for capital at Series A and beyond.
By providing comprehensive support to its portfolio companies and preparing them for successful exits, Norrsken22 aims to create a lasting impact on Africa’s entrepreneurial ecosystem. The fund’s commitment to addressing the shortage of capital in growth-stage investing will undoubtedly contribute to the continent’s continued growth and development.
