Norrsken22 is deploying $205 million to African Startups!

On a sunny day in Johannesburg, South Africa, Natalie Kolbe, Managing Director of Norrsken22, joins our virtual call with the faint sounds of birds chirping from trees in her manicured lawn. 

She’s wearing a white sweater with her hair tied up in a ponytail, the choice outfit for a day of back-to-back calls with investors and the startups Norrsken22 supports.

I joined the call from my home in foggy London, accompanied by a drizzle faintly tapping my glass window – completely envious of South Africa’s weather.

“Africa’s venture capital ecosystem is vibrant and active but still nascent, and it’s been exciting to support startups through their product and growth lifecycle, Kolbe says. 

For startups in Africa, the growth stage is the most critical. It’s the moment the transformation happens – like the caterpillar’s transition from the egg to the caterpillar, the chrysalis, and then an adult. This transition separates the startups that create billion-dollar businesses from those that fold up. 

That’s Norrsken22’s sweet spot. 

Norrsken22 is a tech growth fund backed by a network of international investors and a board of unicorn founders who have built some of the world’s most successful companies, such as Flutterwave, Klarna, Skype, etc. 

They crossed a milestone with their latest $205 million raise to fund support startups with growth capital for international expansion and impact. 

Kolbe oversees the deployment of this sizeable investment capital to support startups in building their digital infrastructure. 

“It’s important to me as an African to help startups succeed. I’ve worked with founders who want to see more direct African investment on their cap table, and that’s why we’ve designed the fund to operate as it does.” 

Building a business in Africa is hard work. Africa’s richest man, Alhaji Dangote, recently quipped that God spares Africa’s business owners from judgement on the last day by sending them straight to heaven, as they’ve suffered enough on earth. 

Huge Investment Potential in Africa

Kolbe’s prior experience in Private Equity led to this moment.

“Having Africans invest in more startups is vital for the ecosystem, which is why our work is so important. We provide ground expertise and networks that some international funds don’t bring to the ecosystem, and it’s great that we are one of the funds on the continent that provides that”. She shared.

Plus, the expansion of the youth demographic has contributed to the explosive growth of startups like Chowdeck and PiggyVest.

“Africa has the youngest population, and it’s getting younger. The average age is 19, and it’s forecast to go down to 15.” Kolbe says. 

Africa’s young population spends more time on mobile phones than traditional infrastructure, which gives consumer businesses leverage. Kolbe shared that their latest fund is to support startups that match this renaissance.

“This population is the driving force of the continent, so from a tech adoption perspective, you have the population, and it’s the biggest in the world that will adopt tech. You marry that with the investments into digital infrastructure, and you see why we’re excited to invest on the continent right now.” 

Kolbe foresees a massive opportunity for investments in tech and innovation on the continent and the fund’s ability to facilitate that. 

“There are so many sectors to build up on the continent – healthcare, food, edtech, etc, and they need the capital to scale. We are sector agnostic, and I’m glad to see more investments in these spaces”.

The A-team

A team of general partners in Kenya, Nigeria and South Africa manages the fund’s operations on the continent. 

“Lexi Novitske, Ngetha Waithaka, and I have different skills, which are complementary.” Said Kolbe. “We understand the success factors for early-stage businesses and have spirited debates when deciding to fund startups. Our Investment Committee meetings are usually fun and lively because we have diverse thoughts.”

Norrsken22’s founding partners have built and backed some of Africa’s most successful companies.

“My team and I have witnessed how the markets and businesses have developed on the continent, and we have a window into its potential, so I love that my partners and I have the unique opportunity to drive the growth of the next generation of businesses in Africa.”

Deploying $205 million to Startups

Natalie Kolbe and her team worked with a diverse investor base – unicorn founders, DFIs, Standard Bank, etc.- to raise their $205 million fund. They sought investors who saw the same potential for tech businesses on the continent and shared their investment thesis.

“The fundraising period was challenging, with six months of no response from investors, followed by a gradual market opening in 2023. Our target was $200 million, but my team closed $205 million, and we worked with only investors that believe in the continent as much as we do”.

The fund is structured for ten years plus one, with plans to raise more money if needed. The current check size ranges from $2 million to $10 million, with a minimum investment of $2 million. 

Kolbe shared that their most significant differentiator is the ability to write larger checks, access to a unicorn board, and a team in Africa. 

The fund will support businesses that align with their values and strategic goals and continue to raise capital to support growth-stage investments in African startups.

“I’m deeply committed to providing value to our portfolio companies beyond financial investments. This commitment is at the core of our operations and is important to me.”