The E3 Low Carbon Economy Fund for Africa (E3LCEF) has reached its first close at $48.1 million.
The fund, which is managed by early-stage VC E3 Capital and emerging markets-focused investment bank Lion’s Head Global Partners, aims to close at $100 million and will provide initial and follow-on funding to startups in Africa’s climate tech sector.
The fund’s limited partners include FMO, Swedfund International AB, Proparco, and KfW, in partnership with BMZ.
The fund will invest in businesses across sub-Saharan Africa, such as solar providers and EV startups, supporting low-carbon economies.
Founder and managing partner of E3 Capital, Paras Patel, said in a statement, “African businesses are starting to emerge with clear product market-fit, and a strong commercial potential at the core within the low carbon economy. The quality of entrepreneurs we are seeing is striking.”
Patel added that he was passionate about helping African entrepreneurs build the next generation of innovative businesses that innovate, scale and impact the lives of all of us in the coming years.
E3 Capital partner Vladimir Dugin told TechCrunch that the VC typically invests between $500,000 and $3 million in seed to Series A startups.
E3 Capital currently manages the €75 million Energy Access Ventures Fund I (EAVFI), which has made 15 investments in decentralized energy businesses in East, West and Southern Africa.
Asset manager Lion’s Head has $700 million underits portfolio and has a subsidiary that provides corporate finance advisory services to governments, multilaterals and private companies.
The E3LCEF and other climate-focused funds in Africa are providing the much-needed funding to founders leading energy transition efforts and providing solutions that mitigate or help communities cope with the effects of climate change.
Recently emerging funds include Pan-African VC Novastar’s $200 million Africa People + Planet Fund, which backs founders developing agriculture and climate solutions on the continent.
Climate tech venture capital firm Equator also reached the initial close of its fund to back seed and Series A startups in the energy, agriculture, and mobility sectors.
This funding is significant for African startups, particularly those working in the climate tech sector, which has often struggled to secure funding due to the perception of high risk and low returns.
The E3LCEF and other funds like it are helping to bridge this funding gap and support startups that are crucial to Africa’s transition to a low-carbon economy.
The fund’s investment in sub-Saharan Africa will also help to promote economic development and create jobs in the region.
The E3 Low Carbon Economy Fund for Africa (E3LCEF) reaching its first close at $48.1 million is a positive development for African startups working in the climate tech sector, which has often faced funding challenges.
The fund’s investment in sub-Saharan Africa will help to promote economic development and create jobs in the region.
The E3LCEF and other climate-focused funds in Africaare playing a crucial role in supporting the transition to a low-carbon economy and mitigating the effects of climate change.
Source: Techcrunch
