Africa’s venture capital scene is buzzing with excitement as Norrsken22, a Pan-African VC firm, successfully concludes the final closing of its debut fund. With a total of $205 million raised, surpassing its initial target, Norrsken22’s achievement highlights the growing interest from institutional investors in supporting African startups during their critical growth phase.
Key Takeaway
Norrsken22, a Pan-African venture capital firm, closes its debut fund at $205 million, exceeding its initial target. The fund received significant support from a consortium of 30 unicorn founders globally. Despite the challenges posed by the global tech investment landscape, Norrsken22’s growth fund was oversubscribed, reflecting the strong interest from institutional investors in supporting African startups.
Founding Partners and Expansion
Norrsken22 was established by five individuals with extensive experience in venture capital and private equity. The founding partners include Niklas Adalberth, Hans Otterling, managing partner Natalie Kolbe, and general partners Ngetha Waithaka and Lexi Novitske. The firm, which is nearly two years old, has operational teams located in Nigeria, South Africa, Kenya, and Ghana.
The Norrsken22 African Tech Growth Fund
Launched in January last year, the Norrsken22 African Tech Growth Fund secured its first close at $110 million. Notably, approximately 59% of the funding came from a consortium of 30 unicorn founders globally, including Olugbenga Agboola, CEO of Flutterwave, Niklas Zennström, co-founder of Skype, Jacob de Geer, co-founder of iZettle, and Niklas Östberg, co-founder of Delivery Hero.
Challenges and Success
Norrsken22 initially aimed to achieve the final close of its fund by the end of 2022. However, the global tech investment landscape experienced a pullback, affecting fundraising efforts, including those from institutional investors. Despite this, Norrsken22’s growth fund was oversubscribed, marking a significant accomplishment. Managing partner Kolbe attributes this success to a renewed fundraising momentum observed at the beginning of 2023 and the extensive experience of Norrsken22’s founding team in African investments. The backing of other limited partners, predominantly founders of unicorn startups, also played a crucial role in attracting interest and support for the fund.
Investment Focus and Portfolio
Norrsken22 aims to bridge the gap in growth to late-stage investments in Africa. Approximately 50% of the fund’s capital will be allocated to Series A and B rounds, while the remaining will focus on follow-on investments in the B and C rounds. The firm primarily seeks entrepreneurs developing fintech, edtech, medtech (health tech), and market-enabling solutions that deliver strong returns and have a positive impact across Africa. Currently, the fund has made investments in five companies, including TymeBank, Sabi, Smile Identity, Autochek, and Shara.
Preparing for Exits
As a growth-stage fund, Norrsken22 places a key focus on preparing its portfolio companies for exits. The firm thoroughly evaluates potential exit scenarios and seeks to identify potential buyers for its portfolio companies. It also assesses the valuations they might offer at the end of the investment period. Norrsken22 is exploring exit opportunities through international strategic buyers, consolidation involving local industry leaders, and potential acquisitions by large multinational corporations in Africa.
Conclusion
Norrsken22’s successful close of its debut fund represents a positive development for growth-stage investments in Africa. With an oversubscribed fund and a strong focus on supporting entrepreneurs across the continent, Norrsken22 is well-positioned to contribute to the growth and success of African startups in the coming years.
