The venture capital firm confirmed the final close of its Africa People and Planet Fund III (NVIII), a fund that is notably larger than its predecessor.

At $147 million, the new fund is about 40% bigger than Fund II, reflecting continued investor confidence despite a challenging global fundraising environment.  

Unlike its earlier funds, which concentrated mainly on East and West Africa, Novastar will now invest across the continent.

This broader mandate signals a shift toward identifying opportunities in additional markets, including North and Southern Africa, as the firm looks to scale its impact. 

The fund is designed to back businesses that address both economic and environmental challenges. Its focus includes sectors such as clean energy, mobility, agriculture, and digital services that improve livelihoods while supporting climate resilience. 

A mix of development finance institutions and global corporates backed the fund.

Key investors include British International Investment, Norfund, Swedfund, Proparco, COFIDES, and the Green Climate Fund.

Japanese institutions have also played a prominent role, with participation from SBI Holdings, Sumitomo Mitsui Banking Corporation, Mitsubishi Corporation, Mitsui O.S.K. Lines, and the Japan International Cooperation Agency. 

The strong presence of Japanese investors highlights growing interest from Asia in Africa’s startup ecosystem, particularly in climate-focused technologies.

This trend comes at a time when global venture capital flows into Africa have slowed, making large fundraises like Novastar’s more significant. 

Novastar has already begun deploying capital from the fund, with its current portfolio including Egyptian delivery platform Breadfast and Nigerian food delivery service Chowdeck, alongside electric mobility companies Greenwheels and ARC Ride.

Other investments include MoPhones, which provides affordable smartphones, and Sistema.bio, a company developing sustainable farming solutions. 

Andrew Carruthers, co-founder and managing partner at Novastar Ventures, said the new fund builds on the firm’s long-standing approach to impact investing.

“Novastar’s investment approach has always focused on transformative businesses that generate lasting financial, social, and environmental value for the common good,” he said.

“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.”

His co-founder, Steve Beck, emphasized the role of investors in advancing the firm’s mission. “We are deeply grateful to our investors for their continued trust and shared conviction in the power of Africa’s entrepreneurs,” he said.

“We’re ever closer to realising our vision of an entrepreneurial revolution on the continent — one that creates lasting value for people and planet.”