NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Alexander Onukwue

In 2019, two private equity firms came together to form a venture capital fund to invest in African startups. That had been a record-breaking year for VC funding in Africa with $1.3 billion invested in startups, and so it made sense that new funds would emerge to ride the wave.

But even as this year’s VC climate has become uncertain, Cathay AfricInvest Innovation Fund (CAIF) wants to find startups that have the potential to break even quickly. “In addition to our usual criteria, specifically traction of the topline, we will be analyzing the capacity of the companies we will be investing in to break even in the shorter term versus in the longer term,” Khaled Ben Jilani, senior partner at AfricInvest and co-head of CAIF, told Quartz.

“A company that is not able, with the money that we inject, to break even after 18 to 24 months will be an issue. It wasn’t the case before.”

Cathay AfricInvest Innovation Fund (CAIF) is one of the largest Africa-focused VC funds

Since October 2019, CAIF has invested in at least 10 African startups across the continent with initial check sizes between €1 million and €10 million. Now, CAIF, formed by Tunisia-based AfricInvest and France-based Cathay Innovation, says it has reached the final close of a €110 million ($112 million) fund to invest in a lot more African startups.