The E3 Low Carbon Economy Fund for Africa (E3LCEF), a fund by early-stage VC E3 Capital and emerging markets-focused investment bank Lion’s Head Global Partners, had first closing at $48.1 million.
E3LCEF’s limited partners include FMO, the Dutch Entrepreneurship Development Bank; Swedenfund International AB, the Swedish development finance institution; Proparco, a subsidiary of the AFD Group and an investor in private sector development, and KfW, a development bank, in partnership with BMZ, the German Ministry for Economic Cooperation and Development.
The fund aims to close at $100 million, joining the growing list of funds supporting startups in Africa’s climate technology sector. The fund will provide seed and follow-up funding to startups supporting low-carbon economies such as solar energy providers and EV startups.
“African companies are emerging with clear products that fit the market, and strong business potential at the core of the low-carbon economy. The quality of entrepreneurs we’re seeing is amazing,” E3 Capital founder and managing partner Paras Patel said in a statement.
“We are excited to help African entrepreneurs build the next generation of innovative businesses that innovate, scale and impact the lives of all of us in the years to come,” Patel said.
E3 Capital Partner Vladimir Dugin told TechCrunch that venture capital, which backs Series A startups, typically invests between $500,000 and $3 million. The new fund will invest in businesses across sub-Saharan Africa.
E3 Capital, an active investor in Africa, currently manages the €75m Energy Access Ventures I (EAVFI) fund, which has made 15 investments in decentralized energy businesses in East, West and Southern Africa.
The asset manager, Lion’s Head, has $700 million under its portfolio, and has a subsidiary that provides corporate financial advisory services to governments, multilateral corporations, and private companies.
“We feel this is the right time to support low carbon companies in Africa that are beginning to see widespread potential. The E3 team brings unique experience working with early stage companies across the continent, and has demonstrated this ability with their existing portfolio which is starting to show signs of There are clear winners,” said Lion’s CEO, Clemens Callis.
E3LCEF and other climate-focused funds in Africa provide much-needed financing amid a capital crisis to founders who are leading energy transition efforts, offering solutions that mitigate or help communities deal with the impacts of climate change.
Newly emerging funds include VC Novastar’s $200 million Pan-African People + Planet fund, which supports founders developing agriculture and climate solutions on the continent. Climate-tech venture capital firm Equator has also reached the initial closing of its fund to support Tier 1 startups in the energy, agriculture and mobility sectors.
Other climate-focused African investment vehicles that have recently raised capital include Satgana, the AfricaGoGreen Fund (AAGF), which closed its second tranche of fundraising in February, and the Energy Entrepreneurs Growth Fund (EEGF), which has raised more than 110 million dollars last year. Oxfam Novib and Goodwell have launched a new fund to provide venture debt to startups in this space as well.