Japanese investors back new VC fund targeting African startups

JAPANESE companies, including Mitsubishi Corporation, Sumitomo Mitsui Banking Corporation and Toyota Ventures, invested in a US$147 million venture-capital fund that is focused on Africa, in a sign of growing interest from Japan in the continent’s startups.

The Novastar Ventures fund also drew investors including SBI Holdings, Mitsui OSK Lines and the Japan International Cooperation Agency, said partner Steve Beck.

In an interview, he said that the Japanese investors “want access to knowledge and deal flow on the continent”.

He added: “We are also giving them co-investment rights into the companies.”

The backing by large Japanese firms underscores the growing interest from the nation in African companies, as they contend with a shrinking market and relatively low interest rates at home.

In 2025, more than 60 Japanese investors backed over 190 deals on the continent, spanning corporate-venture arms, banks and public agencies, said research firm Briter.

The fundraising comes after a subdued year for African venture capital, with firms raising only US$107 million in 2025, based on the Venture Capital in Africa Report by the Africa Venture Capital Association.

Novastar invests largely in green technology startups because if companies only replicate the industrial strategy of the global north, “we are all cooked”, said Beck.

He noted: “If we attach some of the planet-positive technologies to the rapid growth engine in Africa, there can be an acceleration into the new economy.”

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Nairobi-based Novastar used the latest fund to invest in electric bus company BasiGo and the fleet manager for Uber’s two-wheeler electric-vehicle fleet Greenwheels in Kenya, he said.

Another related investment was in ARC Ride, that does the battery swapping, he added.

Novastar has also invested in Egypt’s Breadfast that raised US$50 million recently, and Nigerian online food company Chowdeck, which was electrifying their fleet, said Beck.

With the latest fund, Novastar will look for deals in South Africa. Other investors into the new venture-capital fund include British International Investment, Norfund, Swedfund, Proparco and Cofides, as well as private capital, he added. BLOOMBERG