Norrsken, VCs and 30 Unicorn Founders Set Up $200M Fund to Back Growth-Stage Startups in Africa

Norrsken, VCs and 30 Unicorn Founders Set Up $200M Fund to Back Growth-Stage Startups in Africa

Niklas Adalberth’s Norrsken Foundation has made headlines once again, just two months after launching its Norrsken House in Kigali, Rwanda, which will house hundreds of entrepreneurs by next year. This time, the foundation has collaborated with thirty unicorn entrepreneurs as well as a few seasoned venture capital and private equity investors to launch a $200 million fund aimed at African startups.

According to a statement obtained by TechCrunch, the fund, branded the Norrsken22 African Tech Growth Fund, has reached its initial close of $110 million. It’s Norrsken’s latest fund, following the closure of a €125 million impact fund for European companies in March. Hans Otterling, a partner at Northzone, a U.K.-based early venture capital firm that led the investment in Adalberth’s prior startup Klarna, founded Norrsken.

General partners Natalie Kolbe, the ex-global head of private equity at Actis, a private equity fund focused on emerging countries, Ngetha Waithaka, and Lexi Novitske, the ex-managing partner at Acuity Ventures Platform, make up the firm’s investment. On a teleconference with TechCrunch, Novitske said the firm is in talks with a couple DFIs and hopes to close the deal later this year. Novitske was a principal at Singularity Investments before joining Acuity. API fintechs like Mono and OnePipe, as well as exiting startups like Flutterwave, Paystack, and mPharma, are among the firms’ portfolio companies.

Fintech API infrastructure providers entered the African tech landscape last year, bringing Plaid-like services to businesses and developers. Moreover, the interest in these companies, especially from venture capitalists, grew exponentially this year, with each major participant raising substantial seed to Series A rounds. Today, OnePipe, a financial API business with a unique play, joins the list, earning $3.5 million in venture funding to expand its embedded finance offering. Impact-oriented in Africa VC Atlantica Ventures, which a co-lead investor in OnePipe’s $950,000 pre-seed investment last year, joined Tribe Capital and V&R Associates to co-lead this seed round.

Africa’s VC funding hit an all-time high of $4 billion in 2021, more than the continent’s businesses raised in the previous two years combined. This expansion mostly fuelled by growth and late-stage deals such as $100 million-plus rounds from unicorns Andela, Flutterwave, Chipper Cash, OPay, and Wave, as well as other startups. Nonetheless, according to Briter Bridges and The Big Deal, they were far fewer than early-stage deals. Aside from the lack of growth and late-stage tests, there is another difficulty. Local investors prefer to focus on pre-seed to Series rounds with micro to medium-sized funds; hence overseas VCs finance most of these huge deals.