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53e9 Cathay AfricInvest Innovation Fund (CAIF), 53e9 a Pan-African fund launched via 53e9 a partnership between 53e9 AfricInvest 53e9 , a multi-asset investment platform 53e9 in Africa and 53e9 Cathay Innovation 53e9 , a European-born but global-focused 53e9 venture capital firm, has achieved 53e9 a final close of €110 53e9 million.
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53e9 Just last week, Cathay Innovation 53e9 53e9 announced that it was targeting 53e9 to raise €1 billion 53e9 for its third fund 53e9 to invest in growth and 53e9 later-stage companies across Europe, North 53e9 America, Latin America and Asia. 53e9 Within the last three months, 53e9 the fund launched two sister 53e9 entities: a 53e9 $110 million crypto fund 53e9 and a 53e9 $500 million health fund 53e9 .
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53e9 Cathay Innovation carries a different 53e9 approach in Africa. Unlike other 53e9 regions where the firm invests 53e9 from its multistage fund and 53e9 ventures on its own, for 53e9 Africa, it partnered with the 53e9 Tunisian-based AfricInvest in 2019 to 53e9 back promising early to growth-stage 53e9 startups on the continent.
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53e9 Founded in 1994, AfricInvest handles 53e9 multiple asset classes, from private 53e9 equity to venture capital to 53e9 private credit. Over the past 53e9 decades, the firm has raised 53e9 more than $2 billion across 53e9 21 funds. Its 200+ portfolio 53e9 companies, of which 106 have 53e9 exited, span 25 countries. 53e9 A track record such as 53e9 this is what Cathay Innovation 53e9 — which has $2 billion 53e9 in AUM and offices across 53e9 San Francisco, New York, Paris, 53e9 Shanghai, Beijing and Singapore — 53e9 sought four years ago when 53e9 bought firms struck the partnership 53e9 and formed CAIF.
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53e9 CAIF first 53e9 announced its fund 53e9 in 2019. At the 53e9 time, it was looking to 53e9 raise $168 million for Series 53e9 A to Series C investments. 53e9 While the fund’s final close 53e9 suggests that the fundraising plans 53e9 didn’t go as planned for 53e9 various reasons, 53e9 Denis Barrier 53e9 , co-founder and CEO of 53e9 Cathay Innovation, told TechCrunch that 53e9 CAIF adjusted its expectations and 53e9 settled on raising €100 million. 53e9 “So, in fact, we exceeded 53e9 this target in terms of 53e9 fundraising,” he said.
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53e9 The chief executive also highlighted 53e9 how CAIF’s backing of early-stage 53e9 founders allowed the firm to 53e9 change its strategy and reaffirm 53e9 its initial conviction of making 53e9 seed to Series A deals. 53e9 However, it has made some 53e9 later-stage bets too. Per a 53e9 statement, the firm invests up 53e9 to €1 million in seed 53e9 stage and between €1 million 53e9 and €10 million in growth-stage 53e9 businesses.
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53e9 Yassine Oussaifi 53e9 , a partner at AfricInvest 53e9 and co-head of CAIF, said 53e9 the firm backs startups with 53e9 “strong” unique selling propositions (USPs) 53e9 and helps them to become 53e9 regional leaders before they pursue 53e9 global ambitions. It’s a step-by-step 53e9 the partner narrates. Africa is 53e9 a big but fragmented market. 53e9 As startups need to expand 53e9 from their home countries to 53e9 another — for instance, Lagos 53e9 to Nairobi or Cairo to 53e9 Casablanca — to achieve massive 53e9 scale, the importance of firms 53e9 like CAIF with resources on 53e9 the ground cannot be overstated. 53e9 But beyond these continental borders, 53e9 utilizing Cathay Innovation’s network is 53e9 critical.
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53e9 “We work hand in hand 53e9 in investing in Africa,” Oussaifi 53e9 told TechCrunch on a call. 53e9 “AfricInvest brings its network and 53e9 presence on the ground to 53e9 African entrepreneurs. And then the 53e9 next stage, we work with 53e9 Cathay to help these companies 53e9 expand beyond Africa, go to 53e9 other emerging markets, and work 53e9 with the expertise and know-how 53e9 in markets they have developed 53e9 across the years.”
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53e9 South African startups 53e9 Aerobotics 53e9 and 53e9 WhereIsMyTransport 53e9 are examples that show 53e9 this process. Both companies, having 53e9 made significant headway in their 53e9 home countries and other African 53e9 markets, expanded to the U.S. 53e9 and Mexico, respectively, with eyes 53e9 on other international markets. In 53e9 some cases, CAIF has funded 53e9 companies incorporated outside Africa but 53e9 with operations on the continent 53e9 — for instance, Heetch, a 53e9 Paris-headquartered ride-hailing startup active in 53e9 Algeria and Morocco. Cathay Innovation 53e9 was an 53e9 investor in Heetch 53e9 before CAIF 53e9 backed the startup 53e9 following its move into 53e9 Africa.
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53e9 There are seven other startups 53e9 in CAIF’s portfolio: 53e9 54gene 53e9 , 53e9 OZÉ 53e9 , Migo, PalmPay, KaiOS, Boomplay 53e9 and GoMyCode (the fund led 53e9 its recent round). They represent 53e9 the sectors CAIF is keen 53e9 on, namely fintech, mobility, digital 53e9 content, agritech, health tech and 53e9 edtech.
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53e9 “Our objective was that our 53e9 portfolio companies will bring their 53e9 products and services to benefit 53e9 100 million users in Africa. 53e9 We’ve already reached almost 150 53e9 million users that have used 53e9 our products or services,” said 53e9 Oussaifi on the wide-reaching impact 53e9 of portfolio startups that CAIF 53e9 manages across its 8 locations.
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53e9 Africa’s venture capital scene reached 53e9 an inflection point last year, 53e9 topping over $5 billion, more 53e9 than it had combined in 53e9 the previous two years. Global 53e9 funds have been the main 53e9 catalysts but take nothing away 53e9 from large Pan-African funds such 53e9 as 53e9 TLcom Capital 53e9 , 53e9 Partech 53e9 , 53e9 Norrsken22 53e9 , 53e9 Novastar 53e9 — 53e9 and now CAIF — 53e9 who have also pulled their 53e9 weight by raising nearly $800 53e9 million in available capital between 53e9 themselves.
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53e9 CAIF noted that this final 53e9 close places it in a 53e9 solid position to double down 53e9 its efforts to focus on 53e9 “innovative and scalable post-revenue” ventures. 53e9 Several LPs invested in this 53e9 fund, including BIO, EIB, Proparco, 53e9 SIFEM, AfricaGrow, Triodos Investment Management 53e9 and FMO. CAIF, in a 53e9 statement, said DFIs, multinational corporations 53e9 and HNIs across Europe, Africa 53e9 and the Middle East were 53e9 also involved.
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53e9 Like many funds in this 53e9 year’s first half, CAIF is 53e9 announcing its fund’s close amid 53e9 venture capital slowdown and economic 53e9 downturn. In response to how 53e9 the firm approaches investments during 53e9 this period, Barrier said: “In 53e9 our portfolio, we see companies 53e9 with good metrics and continue 53e9 to expand. So even if 53e9 there is a dip in 53e9 valuation, the fundamentals of digitization 53e9 and innovation in the next 53e9 ten years are more true 53e9 than ever. So we will 53e9 continue to be very confident 53e9 with what we are doing. 53e9 If our portfolio companies stopped 53e9 doing business and aren’t growing, 53e9 we could be worried. But 53e9 it’s not the case.”
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53e9 Oussaifi, giving his thoughts on 53e9 a broader context, believes the 53e9 venture capital slowdown is a 53e9 short-term event in Africa. As 53e9 long as the tech ecosystem 53e9 continues to evolve and diversify 53e9 from fintech and the Big 53e9 Four to other sectors and 53e9 regions, startups will continue to 53e9 raise money to grow and 53e9 scale, he said.
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