The fund is among the largest Africa-focused venture capital vehicles raised in recent years, reflecting growing interest in impact-driven investments across the continent.

Novastar’s third fund is designed to support businesses that expand access to essential goods and services for everyday consumers, workers, and producers, while also delivering measurable environmental benefits.

These include cutting greenhouse gas emissions, restoring soil health, and protecting biodiversity.

The strategy aligns with a broader shift in African venture capital toward backing companies that combine commercial viability with climate resilience and social impact.

The $147 million fund marks a significant step up from Novastar’s previous vehicle and signals continued investor confidence despite a slowdown in global venture capital flows to Africa.

The firm, which operates from Nairobi and Lagos, has built a track record of investing in startups that address basic needs such as food, mobility, and financial access through scalable, technology-driven models.

Commenting on the investment, Oliver Game, private equity and venture capital lead at Proparco’s East Africa office, said the commitment reflects the institution’s confidence in venture capital as a driver of sustainable growth on the continent.

“At Proparco, we believe that venture capital is a vital tool for driving the green transition in Africa. Our $5 million commitment to Novastar’s latest fund reflects our confidence in their ability to identify and scale tech-enabled solutions for the continent’s most pressing challenges,” he said.

“We are excited to support founders who are building a more inclusive and climate-resilient future for millions of people across Africa,” he added.

The investment is part of the European Union-backed Choose Africa VC initiative, with additional support from the European Fund for Sustainable Development Plus (EFSD+).

The program aims to mobilize capital into high-impact startups and funds across Africa, particularly those addressing climate and development challenges.

Novastar’s latest fund also reflects a wider trend of development finance institutions and global investors stepping in to bridge Africa’s climate financing gap.

With the continent requiring trillions of dollars to meet its climate commitments, venture capital is increasingly being used to channel funding into early- and growth-stage companies developing practical solutions for both economic inclusion and environmental sustainability.