Nairobi-based venture firm Novastar Ventures has reached the final close of its third fund, the Africa People and Planet Fund III (NVIII), at $147 million. The vehicle, which targets early- and growth-stage startups across East and West Africa, carries a strong climate and sustainability mandate aimed at backing companies that deliver both commercial returns and measurable impact on people and the planet.
The announcement, made on Tuesday, highlights growing appetite from Asian limited partners for African venture opportunities. Japanese corporates, including Mitsubishi and entities linked to Toyota, participated in the raise, with some securing co-investment rights that allow them to directly back portfolio companies alongside the fund. This structure offers Japanese investors a lower-risk entry point into a market they have historically approached cautiously.
Novastar, which maintains offices in Nairobi, Lagos, and London, has positioned the new fund to address persistent funding gaps in sectors such as clean energy, sustainable agriculture, mobility, and circular economy solutions. Early deployments already include BasiGo, a Kenyan electric bus company, and a fleet management platform supporting electric two-wheelers for ride-hailing services.
The $147 million close comes against a challenging backdrop for African venture capital. After the 2021–2022 funding boom, deal activity and valuations cooled significantly, with many generalist funds struggling to secure capital. Impact-oriented and climate-focused vehicles like Novastar’s have fared somewhat better, drawing interest from development finance institutions and corporates seeking both ESG alignment and exposure to high-growth emerging markets.
This marks Novastar’s third flagship fund. Its previous vehicle, Africa Fund II, closed at $108 million in 2020, bringing the firm’s total assets under management to around $200 million at that time. The new fund’s final size falls short of the $200 million+ target referenced in earlier planning documents, but the successful close still ranks it among the larger Africa-dedicated venture funds raised in the past 18 months.
For founders in Kenya, Nigeria, Ghana, and neighboring markets, the fund represents fresh dry powder at a time when local currency volatility and global risk aversion have made capital harder to access. Novastar’s strategy emphasizes companies that can scale responsibly while tackling structural challenges, from unreliable electricity grids to fragmented supply chains, that often deter traditional investors.
The participation of Japanese industrial players signals a potential new channel for cross-border collaboration. Beyond pure financial returns, these LPs appear interested in technology transfer, pilot opportunities, and exposure to solutions that could eventually apply in other emerging Asian markets facing similar infrastructure and climate pressures.
Whether $147 million proves sufficient to move the needle in Africa’s capital-constrained ecosystem remains to be seen. The continent still faces a massive climate finance gap, with private investment flows lagging far behind needs. Yet for a specialist manager with nearly 15 years of on-the-ground experience, the fund offers another vehicle to back resilient founders building at the intersection of technology, sustainability, and inclusion.
Novastar’s track record, combined with the strategic backing from Japanese corporates, positions the firm to play a meaningful role in the next wave of African climate entrepreneurship, provided portfolio companies can navigate macroeconomic headwinds and deliver both impact and exits in an increasingly selective environment.
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