In a significant development for African venture capital, HAVAÍC has announced the initial closing of its latest investment vehicle, the African Innovation Fund 3. This move signals a robust commitment to fostering innovation and entrepreneurship across the continent.

Fund Details and Partnerships

The newly launched fund, with a target size of $50 million, has successfully secured $15 million in its first round of commitments. This milestone was achieved in July 2024, thanks to collaborations with key investors including Universum Wealth and The SA SME Fund, alongside various family offices from both local and international backgrounds.

Investment Strategy and Portfolio Expansion

HAVAÍC's strategy for the African Innovation Fund 3 involves making 15 strategic investments. The focus will be on early-stage, high-growth companies that have already generated revenue and demonstrated potential for both regional and global expansion. These investments will span from the seed stage to Series A and B rounds, complementing HAVAÍC's existing portfolio of 20 companies, which collectively serve over 20 million customers across 190 countries.

HAVAÍC's Track Record and Growth

This third fund represents HAVAÍC's largest to date, showcasing the firm's growth trajectory. It follows the $6 million Fund 1 launched in 2016 and the $20 million Fund 2 from 2020. Both previous funds have been fully deployed and are progressing towards additional exits, building on the notable fifth exit achieved by HAVAÍC in the previous year.

Implications for African Venture Capital

The participation of institutional investors like The SA SME Fund reflects a growing trend of increased capital flow into Africa's venture capital ecosystem. This development, coupled with the emergence of new funds supporting African entrepreneurs, paints an optimistic picture for startup ecosystems in HAVAÍC's primary markets: South Africa, Kenya, and Nigeria.

Stakeholder Perspectives

Ian Lessem, HAVAÍC's Managing Partner, emphasized the fund's role in supporting African tech entrepreneurs and fostering economic growth. Jonathan Sieff of Universum Wealth praised HAVAÍC's expertise in identifying lucrative opportunities, while Ketso Gordhan from The SA SME Fund highlighted the dual benefits of commercial returns and social impact.

Recent Performance and Investments

HAVAÍC's 2023 results demonstrated impressive growth, with a 400% increase in total annual revenue and a fifth successful exit. The firm reported 193% in total realized exit returns and 120% in unrealized carrying returns. Recent investments include sports analytics company Sportable, with follow-on investments in RNR, RapidDeploy, hearX Group, and AURA.

The launch of HAVAÍC's African Innovation Fund 3 marks a significant step forward for venture capital in Africa. By providing crucial funding to innovative startups, the fund aims to drive economic growth, create skilled jobs, and support technological advancement across the continent. As African startups continue to gain global recognition, initiatives like this play a vital role in shaping the future of entrepreneurship and innovation in Africa.