Norrsken Foundation has teamed up with 30 unicorn founders, seasoned VCs and a couple of private equity investors to back African startups with $200 million in funds in finding their horns and becoming a unicorn through Norrsken22.
Norrsken Foundation and the quest to help Africa tech startups find their horns
Founded in 2016 by Niklas Adalbert, one of the founders of Swedish fintech unicorn Klarna, Norrsken Foundation was set up to help entrepreneurs solve the world’s biggest challenges through its Norrsken House, a Stockholm-based co-working space for over 350 impact entrepreneurs, the Norrsken Founders Fund, and Norrsken VC.
In 2019, the foundation launched operations in Kigali, Rwanda, as a base for investing across the East and Central African region. Last year, it accepted 11 startups from Africa into the inaugural edition of the Norrsken Impact Accelerator reported by Disrupt Africa.
The accelerator’s goal was to create real change through investing in next-generation business models, focusing on businesses where the impact is a result of the core operations, and also, influence and profit go hand-in-hand.
The accelerator program saw the participation of four Kenyan startups — recruitment startup Afric AI-Labs, fintech platform Asilimia, digital banking service Kwara, and payments startup Nash.
There are three from Ghana — agri-tech startup Complete Farmer, logistics platform Kadi, and e-health startup Wala Health, and another three from Nigerian startups — health insurance startup cribMD, ed-tech platform Gradely, and e-health startup WellaHealth.
Rwandan salary advance service PesaChoice completes the African continent. Other startups hail from Argentina, Sweden, the United States (US), India, and Mexico.
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The foundation had partnered with Hans Otterling, partner at Northzone, and an investment team led by Natalie Kolbe, previously global head of private equity at Actis in South Africa, Actis colleague Ngetha Waithaka in Kenya, and Lexi Novitske, founder of Acuity Venture Partners, to launch the Norrsken22 Africa Tech Growth Fund.
Before Acuity, Novitske was principal at Singularity Investments. Portfolio companies across both firms include API fintech such as Mono and OnePipe; and exited companies like Flutterwave, Paystack and mPharma.
Norrsken22 is managed by a team of general partners deeply ingrained in the African tech ecosystem, with decades of experience supporting African entrepreneurs.
The firm is intended to be a growth-stage local-based firm that will enable startups to unlock significant partnerships to grow revenue, find the best talent, and facilitate expansion plans across Nigeria, Kenya, and South Africa. In other words, the firm is set up to help African startups find their horn and become a unicorn in no time.
Currently, Norrsken22 is the latest big-sized Africa-focused VC fund that includes the likes of TLcom Capital, which recently closed nearly half of its new $150 million funds; Novastar Ventures, a $200 million funds, and Partech Ventures, a $143 million funds.
Norrsken22 “$200M funding” and the Union of Unicorns in Backing Africa Next Tech Giants up to Series C.
Norrsken22 has reached its first close of $110 million, of which $65 million comes from a group of 30 unicorn founders globally. Among them is Flutterwave co-founder Olugbenga ‘GB’ Agboola; Skype co-founder Niklas Zennström; iZettle co-founder, Jacob de Geer; Delivery Hero co-founder Niklas Östberg. Others include Carl Manneh, co-founder Mojang; Sebastian Knutsson, co-founder King; and Willard Ahdritz, founder of Kobalt Music. The $200M fund, dubbed Norrsken22, is the latest fund by Norrsken after closing €125 million impact fund for European startups last March.
Asides from the capital, the unicorn founders will help founders understand what it takes to bring their companies from series A to billion-dollar companies, said the founding partners. The Norrsken22 African Tech Growth Fund is also supported by a local advisory council board, which according to the partners, will help portfolio startups navigate business challenges across the continent.
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Nonkululeko Nyembezi, the chairman of the Johannesburg Stock Exchange (JSE), is a member of this board. Arnold Ekpe, the ex-group chief executive at pan-African bank Ecobank; Phuthuma Nhleko, an ex-chief executive at telecoms giant MTN; and Shingai Mutasa, founder and chief executive at Harare-based investment firm Masawara are the others.
While the other VCs seldomly invest above Series B rounds, Norrsken22 is willing to go beyond that stage and plans to invest 40% of its capital, about $80 Million in Series A and B companies and the rest in follow-on rounds from Series C up until exit.
The firm aims to make 20 investments at an average ticket size of $10 million and may go as high as $16 million, including follow-on rounds in some portfolio companies.
Per sectors, Norrsken22 will rely on its general partners’ years of experience and investment philosophies to back startups in FinTech, MedTech, EdTech and market-enabling solutions such as B2B marketplaces and inventory management businesses.
Looking into the criteria Norrsken22 are keen to consider a startup for investment, Novitske highlighted on a call with Techcabal that:
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“We have taken a narrow focus on our investment criteria. Not because we don’t believe there are no other attractive investment opportunities outside of our mandate, but because we want to be absolutely the best at what we do. Our resources are dedicated to backing companies from the Series A to C rounds, with real customers, repeatable revenue, attractive unit economics, and in our primary markets and sectors. These primary markets are Nigeria, Ghana, Southern Africa, and Eastern Africa. This is also where we have a team on the ground that can really identify and support our partner companies. It’s important to mention that we have set aside approximately half of our funds to support our portfolio champions throughout their lifecycle. Innovation success stories sometimes take time to unlock, and we are committed to being there for the journey.”
She remarked that — “The next set of Africa’s unicorn startups is most likely emerging from the fintech, market enablement, healthtech, and edutech sectors. We believe these are also the sectors that are solving some of Africa’s key societal problems. Market enablement includes software, marketplaces, and APIs [Application Programming Interface], unlocking more efficient trade, logistics, and customer engagement. We are especially excited about the crossover of these two sectors in areas such as embedded finance. And I do not believe everything has already been done in fintech – there are many opportunities still to be unlocked!”
