Tech growth platform with backing from an international network of tech founders, Norrsken22 has raised its first close of $110 million from the targeted $200 million funding aimed at supporting African startups.
The funding dubbed, “Norrsken22 African Tech Growth Fund” is a function of partnership with thirty unicorn founders, top venture capitalists and private equity investors, aimed at providing African startups with the necessary fundings needed. Norrsken22 plans on securing what is left of the funding by the close of 2022.
From the $110 million raised, a total of $65 million comes from a group of unicorn founders globally, the likes of Flutterwave co-founder, Olugbenga Agboola; Skype co-founder, Niklas Zennström; iZettle co-founder, Jacob de Geer; Delivery Hero co-founder Niklas Östberg, Carl Manneh, co-founder Mojang; Sebastian Knutsson, co-founder King; and Willard Ahdritz, founder of Kobalt Music.
The funding was led by Hans Otterling, partner at Northzone, a U.K.-based early VC firm and also saw participation from Natali Kolbe, the ex-global head of private equity at Actis, a private equity fund investing in emerging markets; her colleague, Ngetha Waithaka; and Lexi Novitske, the ex-managing partner at Acuity Ventures Platform.
Founded in 2016 by Niklas Adalberth – one of the founders of Swedish fintech unicorn, Klarna, Norrsken22 is aimed at helping entrepreneurs solve various challenges in that sector.
In 2019, the foundation launched operations in Kigali, Rwanda, which it said it planned to use as a base for investing across the East and Central African region.
In 2021, it accepted 11 startups from Africa into the inaugural edition of the Norrsken Impact Accelerator.
As a result of the challenges faced in the African continent around the shortage of growth and late-stage checks in startups, having many deals often financed by international VCs and local investors prefer to focus on pre-seed to Series A rounds with micro to medium-sized funds, Lexi Novitske, the ex-managing partner at Acuity Ventures Platform in Nigeria said, “Usually, founders, as they grow and want to scale, have to take time away from their business and spend it with Silicon Valley-based investors who they have to educate on the Africa growth story.“
“These investors are coming with their capital, which is valuable, of course, but they’re not coming with the local knowledge to help those companies scale across the continent and that’s the missing middle that we’re looking to unlock with this fund”, he added.
Ngetha Waithaka of Actis stated that beyond Series B rounds, Norrsken22 is willing to go beyond that stage as it looks 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.
In essence, the firm is planning to scale up 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.
Natali Kolbe, the ex-global head of private equity at Actis, also added, “I think that reserve capital pool is really important because we do want to have the ability to support companies through their entire lifecycle. Innovation is uncertain, and it doesn’t happen overnight, so we want to be sure to be able to support the top winners in the company so they can be the champions in the tech ecosystem.”