Sylvia Duruson
Pan-African venture firm Norrsken22 has achieved the final close of its debut fund at $205 million, exceeding the original goal despite a funding slowdown. The Norrsken22 Africa Tech Growth Fund, aims to back startups in their critical growth stage across the continent.
Launched in January 2022, Norrsken22 was founded by partners with extensive VC experience, including Niklas Adalberth, Hans Otterling, Natalie Kolbe, Ngetha Waithaka and Lexi Novitske. With teams across Nigeria, South Africa, Kenya and Ghana, the firm began fundraising when investments in African tech were surging.
Norrsken22 secured $110 million for its first close last year, with 59% coming from 30 global unicorn founders such as Flutterwave’s Olugbenga Agboola and Skype’s Niklas Zennström. The firm looked to hit its final target by the end of 2022 through discussions with DFIs and family offices.
However, the tech investment landscape shifted significantly in 2022. VC activity in Africa dropped from a 2021 range of $5B-$6B down to $2.5B-$3.4B in 2023, based on data from The Big Deal and Briter Bridges. This wider pullback delayed Norrsken22’s final close by a year.
Yet the firm still exceeded expectations, which managing partner Natalie Kolbe attributes to renewed fundraising momentum in early 2023. The partners’ extensive African investment experience and backing from unicorn founders also attracted institutional investor interest.
New LPs like British International Investment, IFC, U.S. DFC, Standard Bank and Norfund came on board for the final close. Overall, the oversubscribed fund highlights a strong institutional appetite to support African startups at scale.
Norrsken22 focuses on Series A and B rounds, allocating 50% of its capital to new deals and the rest to follow-ons, primarily later stage. So far, it has invested in fintech TymeBank, retail platform Sabi, identity verification app Smile Identity, auto finance startup Autochek and merchant lender Shara.
The firm targets startups expanding across borders that need large checks and follow-on support. With partners in Africa’s key economies, Norrsken22 provides local insights and networks alongside its funding capabilities.
Other regionally focused growth funds like Partech, TLcom, Novastar and Algebra have also raised substantial capital lately to meet the shortage of later-stage capital. However, Norrsken22 focuses strictly on Series A and beyond rather than earlier rounds.
Critically, the firm evaluates potential exit paths for each investment, assessing likely acquirers and preparation needed. Norrsken22 sees possible exits via international strategies, mergers with local leaders, and acquisitions by large African corporations looking to innovate.
Its advisory council of multinational business leaders provides valuable perspective into these potential end markets. With diligent exit planning from the start, Norrsken22 aims to set its portfolio up for success.
Overall, the firm’s $205 million fund signals growing investor conviction in Africa’s startup potential beyond its early stages. By providing significant capital for expansion, Norrsken22 empowers innovators to boost their real-world impact.
The fund’s oversubscribed close despite current venture headwinds highlights LPs’ long-term outlook on backing the continent’s next iconic companies. As a pioneer fund focused squarely on African growth rounds, Norrsken22 hit its stride at an opportune time to catalyse an underfunded startup growth stage.
