E3 Capital (previously Energy Access Ventures) and Lion’s Head Global Partners, an investment bank with a focus on emerging markets, have raised $48.1 million in the first close of their E3 Low Carbon Economy Fund for Africa.
Dutch Development Finance Institution FMO, Swedish Development Finance Institution Swedfund International AB, Private Sector Development Investor AFD Group Subsidiary Proparco, and German Development Finance Institution KfW in Partnership with the Federal Ministry for Economic Cooperation and Development (BMZ) make up the E3LCEF Limited Partners.
To join the increasing list of funds supporting entrepreneurs in Africa’s climate tech industry, the fund aims to close at $100 million. Startups, such as solar energy service providers and electric vehicle (EV) companies, will get seed and expansion capital from the fund.
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“African enterprises with product market-fit and great economic potential at the core of the low carbon economy are beginning to emerge. In a statement, E3 Capital founder and managing partner Paras Patel remarked on the “staggering” calibre of the entrepreneurs they were encountering.
“We are 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,” added Patel.
E3 Capital partner Vladimir Dugin said that the VC firm regularly invests between $500,000 and $3 million in firms from the seed stage all the way up to the Series A stage. Businesses all around sub-Saharan Africa will benefit from the new fund’s investments.
Investment firm E3 Capital has made 15 separate investments totalling €75 million in decentralised energy businesses in East, West, and Southern Africa through its Energy Access Ventures Fund I (EAVFI).
The subsidiary of Lion’s Head Asset Management, which manages $700 million on behalf of governments, international organisations, and private corporations, offers corporate finance consultancy services.
More On E3 Capital and Lion’s Head Funding
We believe this is an excellent opportunity to invest in low-carbon firms in Africa that are showing signs of expanding to significant sizes. Clemens Calice, CEO of Lion’s Head, praised the E3 team for their “unique expertise” in working with early-stage startups throughout the continent. “Their existing portfolio is starting to show signs of clear winners.”
Financial support is being provided by the E3LCEF and other climate-focused funds in Africa to entrepreneurs who are spearheading energy transition efforts and developing solutions to assist communities adapt to the impacts of climate change.
Funds like Novastar’s $200 million Africa People + Planet Fund, which supports startup founders working on agriculture and climate solutions on the continent, are relatively new. Equator, a venture capital firm focused on climate technology, has completed the first closure of a fund to support seed and Series A companies working to improve the energy, agriculture, and transportation industries.
The Energy Entrepreneurs Growth Fund (EEGF) raised over $110 million last year, while the Satgana, AfricaGoGreen Fund (AAGF) finished the second tranche of its fundraise in February, all of which are investment entities with an African climate focus. Additionally, a new fund established by Oxfam Novib and Goodwell will give venture debt to early-stage companies in this industry.
