E3 Capital and Lion’s Head Climate Fund Reaches First Closing at $48M to Support African Startups

The E3 Low Carbon Economy Fund for Africa (E3LCEF), an early-stage venture capital fund E3 Capital and investment bank Lion’s Head Global Partners, focused on emerging markets, has closed its first close at $48.1 million.

Limited partners of E3LCEF include FMO, the Dutch business development bank; Swedfund International AB, the Swedish development finance institution; Proparco, subsidiary of the AFD group and private investor in development, and KfW, development bank, in partnership with BMZ, German Ministry for Economic Cooperation and Development.

The fund aims to close at $100 million, joining the growing list of funds supporting climate tech startups in Africa. The fund will provide seed and follow-on funding to startups, such as solar providers and EV startups, supporting low-carbon economies.

“African businesses are beginning to emerge with a clear product market fit and strong business potential at the heart of the low-carbon economy. The quality of entrepreneurs we see is striking,” E3 Capital (formerly Energy Access Ventures) founder and managing partner Paras Patel said in a statement.

“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 for years to come,” Patel said.

E3 Capital partner Vladimir Dugin told TechCrunch that the VC, which backs Series A startups, typically invests between $500,000 and $3 million. The new fund will invest in companies across sub-Saharan Africa.

E3 Capital, an active investor in Africa, currently manages the €75m Energy Access Ventures I (EAVFI) fund, which has made 15 investments in decentralized energy companies in East, West and Southern Africa.

Asset manager Lion’s Head has $700 million in its portfolio and has a subsidiary that provides corporate finance advisory services to governments, multilaterals and private companies.

“We believe this is the perfect time to support low-carbon businesses in Africa that are beginning to see large-scale potential. The E3 team brings unique expertise working with start-ups across the continent and has demonstrated this capability with its existing portfolio which is beginning to show signs of clear winners,” said Clemens Calice, CEO of Lion’s Head.

The E3LCEF and other climate-focused funds in Africa provide much-needed funding amid the capital crunch to founders leading energy transition efforts and provide solutions that mitigate or help communities cope with the effects of climate change. climate change.

Recently emerging funds include Pan-African VC Novastar’s $200 million Africa People + Planet Fund, which supports founders developing agriculture and climate solutions on the continent. Climate technology venture capital firm Equator also closed its fund to support seed and Series A start-ups in the energy, agriculture and mobility sectors.

Other African climate-focused investment vehicles that have recently raised capital include Satgana, AfricaGoGreen Fund (AAGF), which closed the second tranche of its fundraising in February, and the Energy Entrepreneurs Growth Fund (EEGF). ), which raised more than $110 million last year. Oxfam Novib and Goodwell have also launched a new fund to provide venture capital debt to startups in this space.